100% mortgage financing can help you buy a house with little out of
expense. So whether you are a first time homebuyer or an investor, you
easily purchase a home. But not all zero down mortgages are the same.
need to be careful in compare financing offers and finding terms that
meet your budget goals.
Reasons To Pick Zero Down Mortgages
Zero down mortgages are ideal for those renting but who want to get
house with little cash. For the same amount you pay on rent, you can
home equity through appreciation and principal payments.
100% mortgage financing is also an option for those looking to buy a
as a second property or as an investment. Without tying up a lot of
into a down payment, you can secure financing with reasonable rates.
Difference In Zero Down Mortgage Terms
Lending companies treat “zero down” mortgage terms differently. So it
important that you know what kind of contract requirements you are
With 100% financing, you are still required to pay for closing costs,
can add up to thousands. The advantage to these terms is that you have
good idea of the cost of fees. You also have the opportunity to lower
or change terms by paying additional points at the signing.
Loans that require no money at closing are often called 102% mortgages.
Closing costs are still charged, but they become part of the principal.
your loan amount is greater than the propertys selling price, up to
will also be paying interest on the fees.
Finding The Lowest Costing Financing
It is especially important to look at the APR number when comparing
down” financing. With this number you can determine the real cost of
loan, regardless of when closing costs are paid.
When analyzing costs, take a look at the fine print to determine when
application fees are due. Also consider that you may have to pay
for PMI if you choose a conventional loan. Subprime lenders waive this
requirement in most cases.
View our recommended
Mortgage Brokers Online.
Carrie Reeder owns ABC Loan Guide, an online resource with information about Mortgage Refinancing
Online and Home Equity Line
of Credit lenders.