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Mortgage-Helper.com | |
| Your only unbiased source for mortgage and credit information. I don't take applications or "harvest leads." I help people of all credit types avoid ripoffs and save money - since 1999. -- Carolyn Warren |
|
Mortgage-Helper.com | |
| Your only unbiased source for mortgage and credit information. I don't take applications or "harvest leads." I help people of all credit types avoid ripoffs and save money - since 1999. -- Carolyn Warren |
More people are buying homes with zero down loans than ever before! No wonder nearly 70 percent of Americans have kissed renting goodbye! And, if you have the seller pay closing costs, you will may be able to get into your own home for just the cost of the appraisal. Here are some good No Money Down loans to pick from...
Conventional Loans backed by Fannie Mae (FNMA) are the best choice. The higher your score, the better your rate will be. 680 will give you a significantly better rate, but people with scores as low as 527 have been approved through Desktop Underwriting (DU). You will also need to meet the debt-to-income requirements. Having liquid assets such as a savings account and 401(k) can be a significant factor in your approval, and may help to compensate for a marginal credit score or debt-to-income ratio. Beware of PMI (private mortgage insurance), a fee that is added on to your monthly payment, because with zero down loans, they can be very high. However, as of 2007, PMI is now income tax deductible. One fantastic feature of conventional Fannie Mae loans is that they have no prepayment penalty, so you are free to refinance just as soon as your credit score improves.
80/20 Loan is a combination of two loans. This is a clever way to dodge the PMI fee. Your first mortgage is for 80 percent and the second mortgage is for 20 percent. Compare your total monthly payment for this option with the conventional loan to see which is the better choice in your situation. Because of a dramatic increase in loan defaults in the beginning of 2007, fewer lenders are offering 80/20 loans. People who have a credit score less than 620 should go for the single loan, conventional loan mentioned above.
Non-conforming or Sub-prime Zero Down Loans are available for people with credit issues. They have a higher interest rate and closing costs, so they're designed to be temporary loans. Once you improve your credit, you refinance. A big caveat is that people who take these loans are over-charged and ripped off more often than not. This is not hype, it is documented by the Coalition for Responsible Lending. Because people who have imperfect credit don't know exactly what's a fair interest rate, they're fair game for greedy loan officers. Most people are paying 1% - 3% higher than they need to, which adds up to tens of thousand of dollars! They only way to protect yourself from being financially raped is knowledge. Like one loan officer at a "respectable" national lender said, "If they're stupid enough to take it, it's their fault." I highly recommend protecting yourself with Mortgage Ripoffs and Money Savers and How to Buy a House If You Have Bad Credit. Knowledge is your only defense against being over-charged!
Grant Programs do not go by credit score. There are literally over one thousand grants, and you do not have to be low income to qualify for many of these excellent programs. For more information on generous zero down loans and grant programs, see How to Buy a House If You Have Bad Credit and Mortgage Ripoffs and Money Savers.
3% Down Payment
The 3% down payment loan is very popular. You get a better
interest rate than with most zero-down loans. The 3% can be a gift from a family
member or it can be your own money. You can have the seller pay the closing costs
or you can pay them yourself. To qualify for this loan, a score of 620+
is required for conventional loans; however, the FHA and VA loans do not go by credit score, and it's okay if you have a bankruptcy in your past, as long as it was discharged 24 months ago.
Often it makes sense to buy a home now, even before you have money saved, in order to take advantage of tax deductions and to own a home before the prices go even higher. For most people, the quality of life achieved by owning their own home is more than worth the effort, and sometimes costs no more per month than renting.
If you want a no-down or low-down loan, you need knowledge and a specific plan. Afterall, buying a home is a major purchase and a commitment. You will need to evaluate the Good Faith Estimate to keep from being overcharged. You need to know exactly what to look for so you don't get "home buyers remorse." For more information Click Here
