In a market that deals with commercial or residential properties, an increase in the property prices usually does not match the average income of the people who may be interested in buying it. Many people are not in a position to save money for a down payment. There are mortgage companies who prefer their applicants to pay a down payment of at least 5%, in addition to paying closing costs. However, this is an unrealistic expectation and hence many property buyers opt for a, no money down mortgage loan.
The problem with requiring a 20% down payment on a home loan is that in states such as California, where even a small 3 bedroom, 2 bathroom home can cost $400,000 - coming up with $80,000 before you can buy a home is a lot of money that most people simply do not have. In most cases, these people will be perfectly able, to pay their mortgage payments every month on time and with no problems.
If you are a homeowner with poor credit, this type of mortgage could help you qualify for a better interest rate. Having the necessary down payment will allow you to qualify for an interest rate as much as 2-3% less than if you had financed the loan outright with one mortgage. When you finance 100% of the purchase price with two mortgages, you can expect the interest rate on the second loan to be slightly higher than the interest rate on the primary mortgage. There reason for this is because the second lender assumes more risk than the primary mortgage lender; this risk is passed on to the borrower in the form of a higher interest rate.
If you have a good credit score above 670 (be it 680, 700, 720 or above), you will have no problem getting a now money down loan. If your credit score is lower than 670, you can still get 100% financing by working with an experienced lender, who offers mortgage loans to consumers with fair and poor credit scores.
The quickest and best way to find a loan is to get mortgage loan quotes and the compare loan terms. This can usually be done in 24 hours to a few days, at no cost. Evaluate loan terms such as: How much can the lender offer you with no money down - $200,000 or $420,000? What will your interest rate be? If you have poor credit, your interest rate will be higher than someone with a good credit score. What type of loan can the lender offer (Adjustable (ARM), Fixed rate (15 or 30 year), Interest Only, etc).
The problem with requiring a 20% down payment on a home loan is that in states such as California, where even a small 3 bedroom, 2 bathroom home can cost $400,000 - coming up with $80,000 before you can buy a home is a lot of money that most people simply do not have. In most cases, these people will be perfectly able, to pay their mortgage payments every month on time and with no problems.
If you are a homeowner with poor credit, this type of mortgage could help you qualify for a better interest rate. Having the necessary down payment will allow you to qualify for an interest rate as much as 2-3% less than if you had financed the loan outright with one mortgage. When you finance 100% of the purchase price with two mortgages, you can expect the interest rate on the second loan to be slightly higher than the interest rate on the primary mortgage. There reason for this is because the second lender assumes more risk than the primary mortgage lender; this risk is passed on to the borrower in the form of a higher interest rate.
If you have a good credit score above 670 (be it 680, 700, 720 or above), you will have no problem getting a now money down loan. If your credit score is lower than 670, you can still get 100% financing by working with an experienced lender, who offers mortgage loans to consumers with fair and poor credit scores.
The quickest and best way to find a loan is to get mortgage loan quotes and the compare loan terms. This can usually be done in 24 hours to a few days, at no cost. Evaluate loan terms such as: How much can the lender offer you with no money down - $200,000 or $420,000? What will your interest rate be? If you have poor credit, your interest rate will be higher than someone with a good credit score. What type of loan can the lender offer (Adjustable (ARM), Fixed rate (15 or 30 year), Interest Only, etc).
No comments:
Post a Comment