No Down Payment Mortgages

Until just a few years ago, the average down payment for a house or home was 20%. In today’s market, where the median house value can be well over $200,000, that would mean needing to have $40,000 for a down payment. Can you imagine how long it might take the average wage earner to save $40,000?… would it even be possible for most aspiring homeowners?

To circumvent this down payment obstacle for the average home buyer, mortgage lenders introduced mortgages which require no down payment at all. These programs are popularly known as “zero down” or “no down payment” mortgages, and provide 100% financing of the value of the property being purchased.

For many people, putting no money down on a house may be the only way they’re able to buy one. While for others, zero down mortgages make for sound financial strategies. Consider borrowers who are buying a second home or vacation property. It may make sense for them not to tap into retirement savings. Still others live in real estate markets where property appreciation is fast and high, and it just makes sense to purchase a home as fast as possible to capture that fast rising equity and make it theirs.

But while zero down mortgages solve a lot of problems for many different buying situations, borrowers using these mortgages should understand that zero down mortgages represent much increased risk for lenders. Zero down borrowing does not represent the optimal way to acquire a mortgage. So, lenders don’t extend the best rates and pricing to zero down borrowers. We’ve all seen those internet ads hypeing mortgage deals in the “Get a $300,000 mortgage for less than $1,000 per month” fashion. This aggressive kind of pricing is never attached to a zero down loan. These super-hyped programs apply only to very well-qualified borrowers with excellent credit, great assets, verifiable income and who are making a meaningful down payment.

If you’re a zero down borrower with lean assets expect to be at the higher end of pricing on your mortgage. Zero down borrowing simply doesn’t allow consumers to have their “cake and eat it too”. Zero down borrowers, from a lender’s point of view, have less to lose since they’re not putting cash into the deal. So, for the luxury and ability of being able to purchase property with no assets, lenders expect borrowers to pay a little more.

Whatever your borrowing profile, whether you’re a first-time buyer, looking for a weekend, getaway-retreat, saving money for the kids’ college tuition, or eyeing better investments than real estate, if the trade-off of the best rates and pricing makes sense for zero down borrowing, then the best source you’ll find for aggressive, lowest-total-cost, zero down mortgages… many with interest only options, is right here at Mortgage Match. Regardless of where you live or are buying, get preapproved for your zero down mortgage, fast, free and without obligation by clicking here.