100% Financing - 100% Financing allows you to buy a home with no money down.
When considering a 100% loan make sure you check your local appreciation rates. If you take a 100% loan then you run the risk of a downturn in the market. You should be able to talk with your mortgage professional to see if its a financially smart move. If we can be of help at all please contact me at 415-617-5448 or email me at [email protected].
If you are considering purchasing a property with no money down, please contact your local mortgage agent before you write your offer.
One effective way to get a win-win is to help someone with no down payment money on a For Sale By Owner home. The seller is more likely to agree to seller concessions when they know they are saving the realtor commission.
If you find a 100% loan for the buyer and the seller will agree to 6% seller concessions, the broker can get a fair commission for playing real estate agent and directing the parties to a good title company or attorney to help with contracts and closing.
This is often considerably cheaper than FHA because FHA has the mandatory up front PMI of 1.5% although the interest rate may be a little higher than the FHA rate.
You might also ask your mortgage broker about companies that offer to have the PMI added to the interest rate where it is tax deductible, or have them do an 80/20 loan to avoid MI altogether.
Borrowers with strong credit scores will have more 100% financing programs to choose from with better rates than a borrower with a lower score.
Many people wait to receive income tax money, a big bonus at the end of the year, or a large gift from an immediate family member before they begin looking to buy a new home. A 100% zero down loan eliminates this waiting period and allows you to obtain the home you want now. Especially now with the uncertainty of interest rates and where they will be in the next 6-12 months. Now is the time to begin looking for your dream home. Waiting may cause you to accept a higher interest rate because the rates have increased during the time you waited. Even if you do have money available for a down payment it is always a good idea to keep some money put away for a rainy day or for an old furnace that needs to be fixed, an old water heater that needs to be replaced or some other basic home repairs. Also, you may want to have some money left to help pay for some of the costs associated with buying a new home, such as buying window treatments, decorating, new furniture, etc...
Almost all lenders allow this now and it can even be done with poor credit. Down to a 560 currently, although the interest rate will be reflective of your credit score!
By useing 100% home financing option to control your up-front expenses by reducing your down payment to as little as zero without having to pay mortgage insurance. Most commonly know as 80/20 combo mortgages.
Besides being commonly known as 80/20 combo mortgages. 100% Financing can also be called NO MONEY DOWN or ZERO DOWN.
With 100% or Zero Down home loans, a home buyer is able to minimize his or her out of pocket expenses allowing them to purchase their dream home much sooner. In addition this allows more cash for the family to use for other home necessities.
You can now get 100% financing for the full purchase price of a home a single loan. In recent years, loan products have been developed to provide homebuyers with the opportunity to purchase a home without a down payment. For many years, the minimum down payment required was 5% of the purchase price for a home. Then, special first-time homebuyer programs came into existence, which usually required a 3% down payment. Now you can buy a home without a down payment.
Although more difficult to qualify for, there are No Money Down programs for investment properties as well. The property has to be residential, up to 4 units. As an investor pay close attention to your cash flow on any property as 100% financing often pushes expenses beyond income.
100% financing can be a great loan even for those who do have access to a downpayment. Down payment funds can many times can be better kept aside for things such as other investment oportunities, a reserve account for emergencies and future home improvements.
Often you can still do 100% Even with poor credit with a seller carryback. The lender will finance 80% and the seller will finance the remaining 20% Some lenders will allow this even with a credit score as low as 540!
100% financing does not include your closing costs. Your Real Estate Agent may write the closing costs into the contract for the seller to pay so that you may not be required to use any of your funds to purchase your home.
Writing closing costs into the Purchase and Sale contract is called adding "seller concessions". Many lenders will allow up to 6% of the sale price of the home to be paid in seller concessions.
100% Financing programs are offerred by lenders in markets where property values are stable or increasing. In markets that show decreasing property values, lender are much less likely to offer 100% Financing programs.
You will still have to put down earnest money on the home you plan to purchase. If you obtain 100% financing, the earnest money will be used toward your closing costs.
If your credit score is below 700, another excellent way to avoid PMI Private Mortgage Insurance on a 100% purchase is to contact us and enquire about a subprime 100% purchase mortgage loan.
Many people today are opting for 100% financing, or zero down programs. This puts you at an advantage if you already have cash on hand. While it would seem logical to put money down towards your purchase, you may want to consider your situation after the loan closes. Will you have enough cash left over?
100% home loans are widely available nowadays. Not only do government loan programs such as FHA and VA offer Zero Down mortgages, conventional loan programs with No Money Down feature are also offered by many traditional mortgage banks.
580 is a common score that some of the better subprime lenders use as a cutoff for 100% full doc loans.
620-640 is typically the score range needed for 100% stated income loans.
The only disadvantage to buying a home with no money down is that you will build equity in the home more slowly than if you had put money down.
But remember, you can always make extra payments to the principal of your loan. Even paying $10 a month extra will help you build equity faster.
Pros and Cons Of 100% Financing - If you are looking to purchase a new home you have probably found that there are an abundance of financing options for homebuyers seeking 100% financing. If you have equity in your current home, or if you have a little money saved up you may be weighing whether to put money down on the new house, or to use it for other purposes such as paying for a childs education, investing it, etc.
If you find yourself in this position there are going to be tradeoffs regardless of what you decide to do. Here are a few of the pros and cons to taking out 100% financing on a home.
There are several pros and cons to financing 100% of your new home versus putting money down. However, most pros and cons are going to depend on each and every consumers particular situations. On pro for one hundred percent financing is that it allows you to hold onto whatever money you have saved and keep it for a rainy day, for unexpected home repairs, tough times, and other emergencies. By using the little money you have put away in your savings account, checking account or other investment accounts for a down payment on your home, you are tying your liquid assets up into the equity of your home which may not always be easily accessible if an emergency arises. Therefore, 100 percent financing can allow you to hold onto your money and use that for emergencies or to put back into your house as needed.
One Con of 100% financing is that the rates will be higher than if you put money down.
Another Pro of 100% financing is that it turns many renters into home owners. Many renters are living paycheck to paycheck and don't have a sizeable down payment saved. But, they pay all of their bills on time and have consulted with a mortgage professional to make sure that they can afford the payments on their mortgage. In some cities, it is actually cheaper to buy than it is to rent. Why should you continue to rent, simply because you don't have a down payment.
If you'd like to know if you qualify for 100% financing, contact Home Jones at 415-617-5448 or [email protected].
Since the interest rates are higher for the 100% financing, make sure that you are comfortable with the level of the monthly payment.
From an investor's point of view, the return on investment with 100% financing is much greater when the property increases in value than if the investor puts a large down payment.
Being aware of your local real-estate market is essential. If the home value drops below what the mortgage is owed, this could cause more money to be owed than the home is worth. It could become harder then to sell your home if you are in that particular situation. Your real-estate agent along with your mortgage professional will be able to advise you on these situations.