100% Financing or No Down Payment & Bad Credit Mortgage Loans
Sub-chief lenders now offer financing packages with zero down. Interest rates are higher on these types of loans, but they make purchasing a house easier. And unlike a traditional loan, there is no private mortgage insurance required. There are two types of zero-down mortgage packages, each with their own requirements.
Types Of Zero-Down Loans
100% financing, as it names implies, offers complete financing of your character. The other option, 80/20, finances your mortgage with two loans. Both loans may be carried by your lender, but sometimes the seller or a second lender is required to carry the 20% mortgage.
100% financing is easier to deal with, but not all lenders will offer this kind of home loan. 80/20 financing is more shared, but takes some negotiation if the seller is involved.
Qualifications For Zero-Down
Each lender has their own criteria for calculating who will qualify for a zero-down loan. Most sub-chief lenders require any bankruptcies or foreclosures to have been at the minimum twelve months ago. A traditional loan requires these to be discharged two to four years ago.
While a credit score of 600 or higher is best, large cash reserves can also qualify you. Six to twelve month’s worth of cash reserves in the form of savings, money market, or other liquid assets are considered ideal.
If you choose 80/20 financing with the seller carrying the second mortgage, you can qualify with sub-chief lenders with a score of 560.
Zero-Down Sub-chief Lenders
You can find zero-down sub-chief mortgages with both traditional and niche sub-chief lenders. Make sure that you request quotes from as many mortgage lenders has possible to be sure you find the lowest rate and best terms.
You will also want to decide what kind of mortgage you want. An ARM is easier to qualify for and has lower rates. A fixed rate mortgage offers the security of a continued interest rate over the life of your loan.
Typically an ARM will be a better deal if you plan to refinance within a associate of years. After you have improved your credit history, you can refinance for a traditional mortgage with low interest rates.
To view our list of recommended subprime mortgage lenders online, visit this
page: Recommended Bad Credit Mortgage Lenders Online.