How to Find the Best No-Cost & Zero-Down Home Mortgages |
Posted: August 23, 2019 |
For buyers who are short on cash, no-cost and zero-down mortgage loans can put home ownership within easy reach. These programs are also ideal for anyone who prefers to spend as little out-of-pocket as possible when buying a house. Contrary to popular belief, you don’t have to have a six-figure income or stellar credit score to qualify either. In fact, if you find an experienced, local mortgage lender to assist you, you might be surprised at how easy it is to purchase a house with little or no out-of-pocket costs. Can You Buy a House with No Down Payment? Saving up for a down payment is one of the biggest hurdles for potential home buyers. This challenge affects both first-time buyers and buyers looking to sell their current home and purchase a new one – especially if they don’t have a lot of equity in their existing property. Some zero-down mortgages require you have a strong credit score or a low debt-to-income ratio. That said, most buyers can qualify for a low- or no-down payment loan. It may mean having to pay a little more interest but, in the long run, it’s worth the few extra dollars a month as compared to renting. The only way to determine what you can qualify for is to talk to a mortgage company in your area. Your lender can pull your credit report, review your income history and calculate your current debt load to find the right loan program for your needs and qualifications. Zero-Cost Home Loan Programs If you don’t have the funds for closing costs – another common problem for many buyers – you can buy a house (or refinance your current home) using a no-cost mortgage loan. You may have to pay a slightly higher interest rate on your loan, but these mortgages allow you to wrap all your closing costs into the loan. Talk to your mortgage lender about this and other options for reducing or eliminating your closing costs. You may be able to use funds gifted from a family member to cover these expenses or ask the seller to contribute some or all of your out-of-pocket costs at closing. Other No- and Low-Cost Options for Buying a House Depending on your location, your mortgage company may have grant programs and no-interest deferred down payment loans available. Many cities offer down payment or closing grants to qualified buyers. Deferred loan programs will finance your up-front costs – often with no interest – and only require payoff when you sell your home. Others are forgiven after you live in your home for a specified number of years. Another option to consider is a VA loan. These loans are available to active duty military members, veterans who were honorably discharged and many surviving spouses of military members. VA loans typically have a low interest rate and require virtually no money to close on your mortgage. Depending on the location of the property you wish to purchase, USDA loans are another possible option. These mortgages are typically available in outlying, rural areas and offer an attractive, affordable way to purchase a house with little or no money up-front. Finding the right lender is critical, however, as many mortgage banks don’t offer these programs. Look for a local mortgage broker who has access to a variety of home loan products and programs. In Utah, for example, Integrity First Lending specializes in helping buyers find no-cost and zero-down home mortgages. Local mortgage companies are familiar with grant programs and other tools that are available only in a particular area. You may not be able to access these programs using a bank or online mortgage application site.
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