| Before buying a home with "no money down," | | | | Zero Down Home Loan Disadvantages... |
| research the loan program and make an educated | | | | 1. Borrowers are Liable for Closing Cost |
| decision. | | | | A few homebuyers believe a zero down |
| Zero Down Home Loan Advantages... | | | | mortgage loan includes every expenses |
| 1. Provides Homeownership Opportunity | | | | connected with the loan. Misguidedly, these |
| Without zero down mortgage loans, many people | | | | individuals do not prepare for additional fees such |
| would be powerless to buy a home. Mortgage | | | | as settlement fees, earnest money deposit, real |
| lenders offer a multiplicity of products, and certain | | | | estate appraisal, and property inspection. Despite |
| programs have a loan-to-values that necessitates | | | | an approval for 100% financing, borrowers will |
| a substantial down payment. Rather than dedicate | | | | need to save a minimum 3% of the sale price for |
| several years to saving for a starter home, first | | | | additional costs. |
| time homebuyers can take advantage of "no | | | | 2. Mandatory Private Mortgage Insurance |
| money down" mortgages, and buy a home in the | | | | Private mortgage insurance or PMI is a |
| near future. | | | | requirement for every "no money down" home |
| 2. No Upfront Costs | | | | loan. Borrowers who refuse to purchase the |
| A zero down mortgage loan let's borrowers keep | | | | insurance cannot quality for the mortgage. There |
| their available cash, and use the money elsewhere. | | | | are two ways to get around this extra fee. The |
| Use the money to update or re-model the | | | | obvious - save for a down payment. Second, |
| property, which counts toward the improvement | | | | make inquiries about a piggyback loan, wherein |
| value, and increases the property's worth. This | | | | the borrower receives two loans for the purchase |
| type of home loans is perfect for borrowers who | | | | price. Third, make home improvements and |
| can't pay for down payment and closing costs. | | | | increase your property's value. After the property |
| They can select a mortgage that offers 100% | | | | appreciates 20%, the mortgage lender will drop |
| financing, and pay the settlement fees in cash. | | | | PMI charges. |