Zero Down Home Loans

No Money Down is Still Possible!

In a large portion of the housing markets across the nation, the increase in housing prices does not match the areas average household income.

Many individuals are not capable of saving money for an adequate down payment for a house in today's market and are left with only zero down home loans as an option.

In an ideal world, mortgage companies and banks would prefer applicants who have a down payment of at least five percent and preferably 20 percent, in addition to the amount you will need for closing costs.

Regrettably, this is happening less and less as consumers continue to spend not only what they are currently making, but also future earnings.

The amount of homebuyers who are looking to take advantage of the zero down home loan is increasing at an alarming rate.

How do Zero Down Home Loans Work?

Luckily, most mortgage companies realize how tough it is to save for a down payment these days and have created unique loan programs that makes it feasible to purchase a home with little or no out-of-pocket expense.

Generally the larger the down payment you have the better the risk for the bank, as your LTV or loan-to-value is lower giving you a lower perceived risk.

There are many options for a borrower with good credit and no money for a down payment. For instance, some mortgage lenders offer what is called the 80/20 no money down loan (if you can get the seller to pay closing costs).

This involves offering a first mortgage for 80% of the asking price, and a second home equity loan for the remaining 20%. This choice is very useful, as home buyers will avoid paying very expensive PMI (private mortgage insurance).

Home buyers can also obtain a mortgage loan for 103% of the asking price or the final appraised value. This is advantageous because it allows borrowers who are looking to purchase a home the ability to not only put no money down on their dream home, but they are able to finance all of the closing costs into the loan.

How do I Find a zero down home loan?

If you are looking to purchase a home with no money down, contact a mortgage broker as they will generally be a better choice over that of a standard bank.

There are several loan programs that offer the zero down loan option, but you must be prepared to look for them and work through any obstacles that arise with your mortgage broker as these are getting harder and harder to find and qualify for.

Mortgage brokers have access to a huge array of zero down home loans which are most often carried by private money lenders, government programs, sub prime lenders, etc.

Meeting the qualifications for these zero down home loans can be difficult, but well worth it in the end for many future homeowners.

Low down payment choices -
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