Are you in the market to purchase a home but are concerned about not having enough money for the down payment? No down payment home loans or 100% financing for your mortgage loan used to be only advertised during late night infomercials and in obscure real estate publications. The good news is that if you want to buy a house but have little or no money available for the down payment, there are mortgage lenders who are offering no money down home loans in your area. Currently, less than half of all homebuyers put down the standard twenty percent. Among first time homebuyers, less than half put ten percent down, and nearly thirty percent of homebuyers financed the total purchase price of their new home.
Generally speaking, the better your credit the better your chances of getting a zero down payment home loan. Fortunately, mortgage lenders are now offering no money down home loans to homebuyers who have less than perfect credit. You may pay a slightly higher interest rate than those who put down ten percent or more, but you can still get a great interest rate and easy payments when you apply for a no money down home loan. You can expect to pay private mortgage insurance if your pay little or no money down on your new home, but the cost is relatively low and you will be able to drop the private mortgage insurance after you have built a certain amount of equity on your home.
If you do not have the resources to pay a twenty percent down payment, you could opt for a piggyback loan. A piggyback loan is basically a home equity loan that funds part of your down payment. There are several options in obtaining a piggyback loan. Mortgage lenders have a variety of programs and loan products that will help you accomplish your dream of home ownership, even if you have little or no money for a down payment. Your lender can also inform you of various government programs that assist those who qualify with their down payment. Most of these programs consist of basically a low interest loan that you repay along with your mortgage payments. There are some government programs that will not require you to repay any down payment assistance you may receive.
Owning a home is the dream of most people. If you want to purchase a home but are concerned about a lack of money to go towards the down payment, contact a mortgage professional today who can help you in obtaining a no money down home loan.
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By: Carrie Reeder
Posts Tagged ‘Home Equity Loan’
No Money Down Home Loan
April 21st, 2010Different Types Of Home Loans – 7 Different Types Of Home Loans
March 21st, 2010
Are you looking for a home loan, but you are not sure which one is right for you? There are many different types of home loans and it can be very confusing to try to pick the best option for yourself. Here are 7 different types of home loans and what they should be used for.
The first one is the traditional purchase mortgage. This is a home loan you get to buy an existing home. Be careful not to do the 100% financing option because you will start with no equity and it will take you 10 years or so to build any real equity. You should always put at least 10% down.
The second type of home loan is a refinance loan. This is a loan that is used to get a lower rate, pay off debt against your home, or to add on to your home. This is a first mortgage that is usually between 80% and 90% of the value of your home. Make sure the benefits of your refinance out weighs the loan itself.
The third loan is the second mortgage. This is similar to a refinance, but can go up to 100% and sometime 125% of your home value. These are used in emergency situations, especially the 125% loan because the rate is much higher and you will be tying up all your equity.
The fourth different type of home loan is the construction loan. This is a loan that is used to start building a home. It has 4 stages of funding as the home is build and if you are not quite wealthy, then you are wasting your time building. It usually takes a new home around 10 years to appreciate to the value of the original construction loan.
The fifth type of loan is the first time home buyers loan. This is a purchase mortgage that is designed for anybody that is purchasing their first home.
The sixth type of loan is the home equity loan. This is similar to a second mortgage, but many times the rate is prime plus a percentage. These are good for people that just need a little bit of money.
The seventh different type of home loan is a line of credit. This is a revolving account that works much like a credit card only your home is the collateral. These are good for people with a business or with an addition to their home because if either one gets more expensive than planned for you can take out more money on your line of credit.
There you have it, seven different types of home loans. Now you just need to pick the right one for you and start applying.
By: Gressly Stevens
Home Loans For First Time Buyers With Bad Credit
March 15th, 2010
First time home buyers with bad credit have a lot of options when it comes to financing their purchase. You don’t need to worry about getting approved, since almost all applications are accepted today. Instead, you should focus on getting the best rates and fees on your home loan.
Get Your Credit In Order
Before you start home loan shopping, make sure your credit is in order. Even with poor credit, you should check for any errors in your credit report. You can also include a letter explaining the circumstances around a late payment or bankruptcy. Some lenders will adjust your credit score and rate if the information can be verified.
You may also want to request your credit score to see where you stand. A score of 600 or higher will get you accepted by most conventional lenders. You can pay to get your score with a reporting agency or receive it free as part of an introductory offer with a credit monitoring service.
Think About Down Payment And Your Budget
Down payments can also improve your rates. For the lowest rates, put down 20% or more. Remember too, that you can tap into that cash with a home equity loan if you get in a pinch.
You should also look at your budget and see what you can afford for a house payment. Also include the cost of taxes, homeowners’ insurance, and home repairs. With this number, you can determine how much you can afford to borrow.
Look At Interest Rates Not Approval Rates
When you look for a home loan, focus on finding the lowest rates and fees. You want to compare the APR of the loan since this includes both fees and rates. The type and term of your loan will also affect the rate. Adjustable rate mortgages offer the initial lowest rates. Short term loans also have lower rates.
Start requesting no obligation quotes from both conventional and subprime lenders. Once you have found the most favorable terms, you have two options. You can get pre-approved and then go home shopping. The other option is find the home and then lock in the deal. Getting pre-approved may give you an edge in negotiating a deal and locking in low rates.
By: Carrie Reeder
