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The benefit of buying a home with no money down is that you will be able to use the money you normally would use for a down payment for other things, such as closing costs, or putting it toward new furniture.
One of the requirements for buying a home with no money down is having excellent credit, or, at the very least, next to excellent credit.
Keep in mind, when borrowing up to 100% of the value of a home, the lender may charge you a bit more by bumping up the interest rate.
The lender does this because when they approve a loan for 100% as opposed to 95%, they are taking on more of a risk. Therefore, they slightly raise the rate.
Home Buying Terminology -- What s PMI?If you re entering the home buying process, the term PMI will probably pop up on your radar. So what is PMI, and what does it have to do with your bottom line?
Private Mortgage Insurance, or PMI, is required on most mortgages with a loan-to-value ratio of 80% or more. In other words, if you put less than 20% down when buying a home, you will probably have to pay PMI.
A third-party insurer provides PMI to protect the mortgage lender. This is a critical point. Many homebuyers think PMI is designed to somehow protect them, but this is not the case. PMI protects the lender in case you default on ..
Remember, borrowing up to 100% can be very convenient if you simply dont have the money for the down payment, and we all know, we pay for convenience.
Because of the slightly higher interest rate you may run into in this situation, you may want to consider shopping around for the best rate and product to fit your needs and budget.
The mortgage industry is a highly competitive one, and there are many mortgage companies out there across the United States that offer programs with the option to purchase a home with no money down.
If you are not interested in doing the shopping around yourself, or simply just dont have the time, you may want to consider hiring a broker to do it for you.
Home Buying 101: Pre-Qualification Vs. Pre-ApprovalGetting pre-approved for a mortgage loan can make the entire home buying process go smoother. But don t confuse pre-approval with pre-qualification, as many home buyers do.
What is Pre-Qualification?
Pre-qualification is an informal look at your income vs. debt to see how much of a mortgage loan you might qualify for. Pre-qualification does not take your credit into account, so it does not guarantee loan approval. It s just a quick review of your income and your debt -- the two factors that make up your debt-to-income ratio.
What is Pre-Approval?
Pre-approval means a mortgage lender has ex ..
Brokers have access to hundreds of lenders across the United States, making it easier to shop a few mortgage companies for you.
It really wouldnt hurt to allow one of these brokers to assess your situation than let them speak with a few lenders to see what kind of deal they come back to you with. Once they have done this, you can base your consideration on the best rate and program they can get you for buying your home with no money down.
Keep in mind, mortgage brokers and lenders work on commission, so finding you a mortgage product and getting it to the table is just as important to them as it is to you. Best of luck.
About the Author: Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of http://www.explainingmortgages.com/" target="_blank"> http://www.explainingmortgages.com/, a mortgage resource site devoted to making mortgage terms and products easy to understand.
Source: http://www.isnare.com Jennifer HersheyBuying A Home With No Money Down
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