Zero Down Payment Mortgage

An article submitted by Marc Sisk, marcpmfi@indy.rr.com, who is solely responsible for its contents.

“I’ve been renting for years now; I’ve always paid my rent on time.  I’ll start a savings account soon, so I can buy a house”:  sound familiar?  How much is in that savings account now?
Just as I thought, not enough, you went on vacation, found a car you had to have, or WOW; look at the flat panel T.V. on the wall that you’re renting, etc, etc.  There’s a secret that your landlord doesn’t want you to know; you can buy a house with zero down payment.  Do you want to know how?  Hang on, here we go.  Hire a good mortgage professional, it’s that easy.  Do you want to know more?  Of course you do, here are some mortgage programs to help you.

Many companies will do a 100% one loan.  This program can be done as a conforming, (good credit, full income documentation; prove income through W-2’s and recent pay stubs) or sub prime (those borrowers that don’t quite fit into conforming guidelines due to less than perfect credit or trouble verifying income).

There is an 80/20 combo home loan too if you don’t mind paying 2 monthly payments to pay your mortgage.  The advantage to this is you don’t have to carry mortgage insurance on your first mortgage as your loan to value is 80%, that’s the cut off for carrying mortgage insurance.  That usually means a savings of $40.00 to $90.00 per month over a 100% one loan, however the 80/20 combo home loan is a bit more difficult to qualify for.

The best option, if you’re non-military, is a FHA mortgage loan.  This is a mortgage that’s backed by the government so there’s less risk to the lender.  Now a FHA mortgage loan requires a 3% down payment, but that can be gifted through a down payment assistance program that the seller participates in.  The great thing about a FHA loan is the interest rates are low and usually the seller of the home will pay most of your closing cost.  Therefore you’re buying the house with zero or very little out of pocket expense.

If you’re in the military or a veteran of the military have your mortgage professional check your eligibility to use the VA (Dept. of Veteran Affairs) to back your mortgage.  The VA requires zero down payment at a low mortgage interest rate, and your seller will generally pay the majority of your closing cost.  Again, you’re buying the house with very little or no out of pocket expense.

These are the most popular programs for a zero down payment mortgage.  You don’t have to have perfect credit or a ton of money to buy a home.  Just prove you’re responsible, have the ability to pay for your home, and the willingness to pay for your home.  The mortgage professional you hire should have a list of real estate professionals to help you in your search for a new home, always use a Realtor to help you, it will make your life much easier, and the seller pays their commission from the sale.  Good luck house hunting and finding the perfect mortgage program for you.