What is a Zero-Down Mortgage?
A mortgage that doesn't require money down is called a "zero down payment" mortgage. These loans are not as widely available as other home loans, and qualifying is a bit more challenging. However, a "zero down" home loan has some perks that you should know about.
This article will help you to understand the basics of a zero-down home loan, like:
- Where to get a zero-down home loan
- The pros and cons of a zero-down home loan
- Alternatives to a zero-down home loan
This info is a great starting point for understanding your home loan options, however, for the most accurate information based on your mortgage needs, contact us!
How to Buy a Home With No Money Down
The qualifying process begins the same as any other loan --applying for a home loan! You can start right now, by using our online pre-qualifying application. If a no money down home loan is available to you, we'll let you know! We'll also match you with other mortgage options that you may want to consider.
The types of mortgages that usually have a zero down option are VA loans and USDA loans.
To qualify for a no-money-down VA loan, you’ll need to have good credit, enough income and a Certificate of Eligibility from the VA. Zero-down isn't the only perk of a VA loan. VA loans also eliminate the private mortgage insurance requirement and have lower closing costs than other loans.
A USDA loan offers a variety of low-interest rate home loans, including a zero-down mortgage. USDA loans are designed to help low- or moderate-income people with fair credit buy a home in a rural area.
There are additional qualifying factors when it comes to the home you can buy with a USDA loan. Please contact our office for more details.
An FHA doesn't offer a zero down mortgage, but it does provide an option that is similar. With an FHA loan, you can buy a home with as little as 3.5% down. FHA loan has other benefits too, like limited fees and relaxed qualifying terms.
Pros and Cons of a Zero Down Loan
The main advantage of a zero-down mortgage is that you can buy a home without having to put any money down. However, it does have its downsides.
For example, you'll miss out on having instant equity built up in your home at the time of purchase. Also, a zero-down loan will likely mean that you'll end up paying more over the life of the loan. Is a zero-down mortgage right for you?
There is so much to consider when making financial decisions, especially when it comes to mortgages. However, it all begins with knowing what your options are.