No Money Down Home Loan
You Can Still Obtain a No Money Down Home Loan
Even though the credit markets have tightened considerably over the last few years, it’s a fact that you can still obtain a no money down home loan if you do the research and prepare well for the exercise that’s going to be needed to get it. No money down home loans are out there, truthfully, but they aren’t going to leap into any prospective homebuyer’s lap all on their own.
What this means is that the typical no money down home loan is going to take work in order to hook it. The first thing that’s going to be needed is a realization that a no money down home mortgage or loan will require a great deal of documentation on the part of home buyers. For example, anyone looking for a no money down home loan should expect to have at least good credit.
These days, “good” credit usually means a credit score of 700, at minimum. Just a couple of years ago, someone with a 650 score could have gotten a no money down home loan relatively easily. That just isn’t the case these days, unfortunately. Also, beware a so-called no money down home loan that features steep closing costs and other fees.
In that case, it’s just a way for the lender to generate additional upfront income through imposition of certain fees attached to the closing. It’s also sometimes the case where the lender may advertise a no money down home loan and then offer to roll these fees into the mortgage. In truth, it can be a way to avoid paying thousands of dollars and obtain a true no money down home loan, it must be said.
Just be prepared to pay a slightly higher interest rate for a home when buying it through a no money down home loan product offered by a lender. On average, the interest rate for such a loan can range from one quarter to two-points higher than the lowest available interest rate for people with good credit. One needs to take a frank assessment of what’s more important in this case.
What this means is, a no money down home loan is a great way to get into a home with no real upfront monetary investment, not expect that the monthly payment would be a little higher for the life of the loan, unless one can swing a refinance 18 to 36 months down the road, which isn’t an altogether unheard-of phenomenon, honestly.
