Zero Down Home Mortgage: No Money Down Mortgage Loans

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Zero Down Home Mortgage: No Money Down Mortgage Loans
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By Louie Latour

If you have been putting off your home purchase because you lack the necessary down payment, there are a number of programs to help you qualify. These programs usually only require that you pay a few thousand dollars at closing. Here are the basics of zero down mortgage loans.

Are No Money Down Mortgages Right for You?

For many prospective homebuyers, a no money down mortgage is the only option for purchasing a home. If you are in this situation and do not have the cash on hand for 20% of the purchase price as your down payment, one of the many zero down mortgage loans could be your answer.

Which Zero Down Mortgage Loan?

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The most common zero down mortgage is a 100% mortgage loan. This means your mortgage will cover 100% of the purchase price and you will only be responsible for application fees and closing costs. The disadvantage of many zero down mortgage loans is that the lenders may require you to purchase Private Mortgage Insurance to qualify for the loan. Private Mortgage Insurance is an expensive policy that only protects the lender if you default on the mortgage. This insurance can add hundreds of dollars to your monthly payment amount.

How to Avoid Private Mortgage Insurance

The best way to avoid paying Private Mortgage Insurance on your zero down mortgage is to use a piggy back mortgage to cover the down payment. These piggyback mortgages are also called 80/20 loans. This means you have two loans for 100 percent of the purchase price; your primary mortgage will be for 80% of the purchase price and the second,

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This entry was posted on Saturday, October 21st, 2006 at 6:30 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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