No Money Down Financing
Buying real estate with no money down can be a GREAT strategy for home buyers. Its almost always an advantage to using OPM (other peoples money) for purchasing a tax advantaged appreciating asset. No money down mortgage financing allows the borrower to conserve cash, keep it liquid and accessible, and allows for more flexibility in moving expenses, new property fix ups, or just other investment opportunities.
The main downside to a no money down mortgage structure is that if the property declines in value, you would have to pay to sell, or possibly enter into a short sale scenario. So while these zero down loans can be great on the front end, it can be prudent to enter into this type of loan with the idea of a long term hold on the property.
There aren’t many remaining programs that allow the borrower to put no money down. This zero down mortgage used to be the fashion in the “mid- aughts”, but these days lenders require a down payment to purchase a home save for 2 scenarios:
Both loans are similar in that they do not require a down payment, they DO include an upfront “funding fee” that is automatically added to the loan balance and financed over the course of the loan term. But as a result of these up front fees, there is no additional monthly Mortgage insurance.
GREAT DEALS these loans!
There is also a special FHA loan for HUD repos that only requires $100 from the borrower. So this is virtually a zero down mortgage and is worth consideration. MORE INFO ON HUD REPO LOANS
Additionally, both the Homepath mortgage, as well as the FHA mortgage allow for the entire downpayment to come from a family gift.
For more information about how to qualify for a zero down mortgage program, please contact me, or fill out the online loan application here.
