When someone mentions a home mortgage loan with no money down you can most of the time bet there will be some hidden costs. Everything from points to appraisal fees to mortgage insurance - it is all calculated into the closing costs. However, it is not impossible to get the loan company or the seller to pay for these items.
At www.rightloans.com the site notes that "Unlike mortgages of years ago, there are dozens of programs available for people to choose when purchasing a home. This is also true for no money down programs or 100% financing."
The site goes on to question how a mortgage company actually can offer no money down loans. It’s a good question too. The answer is by using an 80-10-10 or an 80-20 approach. Basically, this means that you break the loan down into several loans. If you are looking to purchase a home for $100,000 then the first loan would be for $80,000 and the second one for $20,000, which would be considered a short-term mortgage. By getting several loans you then cut the costs of both PMI and MIP. "The first mortgage can usually be anything from a fixed mortgage to an adjustable program. The second mortgage though is most likely a fixed mortgage for a 15-year term," notes rightloans.com.
The 80-20 option is one of the most popular loans requiring no money down because it does not require a person dip into their savings and it beats paying a monthly rent – often for the same cost. However, another thing to look out for when trying to avoid a down payment is PMI or private mortgage insurance. This insurance protects the lender from any costs if the house is foreclosed on down the road. When the mortgage is for more than 80% of the home’s value then a PMI cost will be in there somewhere – that’s why the 80-20 scheme is so popular with many home buyers.
Nationwide Mortgages says at their website that they offer a 100% home mortgage financing program that highlight zero money down. Again, this is accomplished with zero down payments and the way the paperwork is handled. From no income verification loans to first-time buyer loans or loans for buyers who are self-employed, there are ways to make a no down payment option work for you. In many cases it simply means that the seller might be required to pay the six percent of the sales price toward the closing costs.
If you truly don’t have the money for a down payment on your next house don’t despair. There are many mortgage companies and lenders out there willing to work with you anyway in an effort to get you into your dream home. According to Shay Ryan of Smart Home Equity Loans, there are many creative ways to use combo loans to 100%." It seems the first step is locking the interest rate with a mortgage lender you are comfortable working with.
For a Free Home Equity Quote Call Us at 877.236.3836 or Get a No Hassle Loan Quote Online.
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