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Zero Down Mortgages
We've all seen the infomercials on How to Buy a Home with Nothing Down. Can it really work? Is there such a thing?
The answer is yes, however, zero down DOES NOT mean something for nothing. One only has to look at DVA (VA) guaranteed mortgages to see that zero down mortgages exist. All one has to do is join the military for a "couple of years or so" to qualify. That is certainly not, something for nothing!
I will give you an overview and general information regarding purchasing with zero down. If this is something you are interested in, feel free to email me at zerodown@kentallen.com.
Zero down mortgage are available through
DVA, VA - requires decent credit and qualifying military service
FHA - With the Grant Program available through select mortgage companies
Conventional - Through programs with differing creditworthiness requirements
DVA (VA) guaranteed loans. Not all DVA mortgages are available with zero down, but most first time buyers will qualify for a zero down mortgage. Closing costs may be financed too. I have had several VA buyers over the years that actually received some or all of their earnest money deposit back at closing.
Qualifications guidelines are generally less restrictive than with conventional lending programs
FHA - Has a relatively new program, commonly called the Grant Program.
This is a unique way for buyers with good jobs but little cash to purchase a home today, before costs go up. This program is only available through select lenders, one of whom I work with. The program requires seller participation and a grant through a granting company. Closing costs and down payment grants are added to the sale price. The sale is still subject to appraisal. This does ad to the purchase price of the home but is a great way to get a home without having to wait until a down payment has been saved, and housing prices are higher than they are today.
This program is a good example of something for something. This program sounds confusing, but is really pretty simple. You can email me at grantprogram@kentallen.com or read the free report on the FHA Grant Program here
Conventional Conforming Loan Programs
Conventional Non-Conforming Loan Programs - As you probably expect, buyers with bruised credit can expect to pay higher interest rates and closing cost amounts. The good news is, that there are programs here, as well, that provide a zero down loan for an owner occupied purchase.
Most common of these are the 75/25 or 80/20 loans. This simply means the first mortgage company, realizing your credit is poor, will only give a mortgage from 75 to 80 percent of the purchase price. This enables them to lower their risk in the event you default on your first mortgage and the property is foreclosed on. The remaining down payment amount of 20-25 percent comes from a second mortgage to fill the gap. A seller may also provide this remaining percentage by offering to "carry-back" financing in the form of a purchase money mortgage. This is very difficult to find in our marketplace.
There are dozens of variations available, just ask.
Not everyone can, or should, obtain a zero down mortgage. I do have access to hundreds of loan programs for buyers of all levels of creditworthiness from great credit "no doc" loans up to loans for people with credit so bad and rates so high I blush to even think of it.
How High? I have seen loans that closed 6% above market rates. I have seen a seller pay 13 points plus closing costs and commissions, and I have seen loans with origination fees as high as 4% whereas good credit buyers pay only 1%.
I can't get everyone financed, but if I can't get you a mortgage, nobody can.
There are other types of programs as well. Fore example, someone can borrow from a 401K for the down payment. I also have extensive experience with purchase money mortgages, contracts for deed, wrap contracts drawn from my experience as far back as the late 1970's.
There aren't many agents with experience going back that far.
If you need more information on contract for deed purchases, please view the free report here
I do meet buyers who contact me and say, they need contract for deed financing, have poor credit and no cash to work with. Sorry, but I can not help you get a zero down mortgage. There is one government program that offers homes with as little as 2.5% down payment, however, there are very few programs available and YOU WILL PAY 20 TO 30 PERCENT ABOVE MARKET VALUE, to get one of these homes.
As I mentioned at the beginning of this page, I can do zero down mortgages, but only when it is something for something.
If you desire further information and are not currently under contract with another agent, feel free to contact me.
zerodown@kentallen.com.
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