No Down Payment Home Loans

No Down Payment Home Loans

No Down Payment Home Loans

No down payment home loans or zero down payment loans are becoming more common. What are they and how can you find them? Read on to find out how.

The option of finding 100% financing is one way a first time home buyer can purchase a home if they cannot afford the down payment. This type of loan is usually required to be secured by buying private mortgage insurance.

Who qualifies for no down payment home loans? If your credit is good enough to rent a home through a rental agency, it probably is good enough for zero down payment loans. Renting a home or an apartment is the alternative for most because they cannot afford the down payment necessary to buy a home.

Lenders are beginning to realize that these are the people who will most likely be a good credit risk when it comes to borrowing the money for a home loan. Their only problem with buying a home is saving enough for the down payment. Their credit is not bad; they just cannot afford the down payment and closing costs and all the expense associated with buying a home. Once they are in the home, making the payment becomes no different than paying the rent they are paying presently.

In addition, if they get zero down loans to purchase their home, they do not have to pay closing because the financing they are getting is more than 100%. This would be a first mortgage for 80% of the purchase price of the home and a second mortgage for 20% of the purchase price.

In the event that you do not qualify for a typical zero down loan, you should check into the other programs that are available. There are some government guarantee programs that allow home purchases without a down payment. Some are for low income families and other are for those who live in rural areas. The programs that the government has are really very competitive and if this is the option you are considering, you will want to look very closely at the different types.

A VA home loan may be the answer. They do have 100% financing and no down payment. The benefits of a VA home loan are some of the best as well. You do not have to purchase private mortgage insurance as with many of the zero down payment loans. This alone can save home buyers hundreds of dollars a month.

There is no pre-payment penalty if VA home loans are paid off early. The interest rates are quite competitive and perfect credit is not a requirement for a VA loan. Poor credit is not good but those using VA loans can have average credit.

Knowing where to look for no down payment home loans is half the battle. There are many organizations that are helping those who want to buy a home but lack the down payment. One program, the Nehemiah Program through FHA is an organization that makes available down payment grants for homeowners and is one place to look.

They will even help with the search for a new home and with making offers on the home. Getting the loan documents in order and working with realtors are all services that are provided by this organization.

So the help is out there if you are looking for no down payment home loans. You should take your time and explore the possibilities before making a choice.

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