No Money Down Mortgages

A lot of people need some guidance when applying for a mortgage. The process included many details that are critical in determining how long your loan will be and what you will pay. What many borrowers do not know is the many programs available to buy a new home with a almost No Money Down Mortgages.

HFA Program

In California, the state offers a program where they contribute up to 3% of the home purchase price. There are some restrictions but basically, you need to live in the home as your primary residence and don’t sell it for 5 years. If you buy a home with a FHA home loan, it requires 3.5% down. Using the California mortgage assistance program and a bit of seller contribution toward closing cost and your in with no money down.

Save enough money to make a down payment. Lenders may accept as little as 3.5% down but try to make a larger down payment. If you put down 20% of your total mortgage, you won’t have to pay private mortgage insurance and your payments will be lower. You will also need cash to pay closing costs, application fees and other expenses.

Consider unexpected expenses when you decide on the monthly mortgage payment that you can afford. It is not always a good idea to borrow the maximum that the lender will allow if your payment will stretch your budget to the limit and unexpected bills would leave you unable to make your payment.

Buy with Seller Contributions

When you make an offer on a new house, ask for the seller to contribute up to 3% towards your closing cost. The 3% should cover most cost and you only need the down payment. If you get the real estate agents to contribute, your in with no money down.

Having the correct documentation is important before applying for a home mortgage. Before speaking to a lender, you’ll want to have bank statements, income tax returns and W-2s, and at least your last two paycheck stubs. If you can, prepare these documents in electronic format for easy and quick transmission to the lender.

You may wish to refinance without closing costs with No Money Down Mortgages. You do not always need to spend your money to save money when you refinance. Many lenders will offer mortgages that have no closing costs. Lenders make up for these costs by charging you an interest rate that’s slightly higher. This slight increase sometimes translates into some extra dollars in your monthly payment, but you can save thousands in your closing costs.

You may be able to add your homeowners insurance costs to your mortgage payment. One advantage of this is negating the need to make two payments. Instead of paying your mortgage and an insurance bill, you can pay both bills in one payment. If you like to consolidate your bills, this is a good idea.

Keep your job. Lenders look into many aspects of your financial situation and one very important aspect is your employment income. Stability is very important to lenders. Avoid moving jobs or relocating for as long as possible before you apply for a home mortgage. This will show them that you are stable.

You can request for the seller to pay for certain closing costs. For example, a seller can pay either a percentage of the closing cost or for certain services. Many times the seller is responsible for paying for a termite inspection along with a survey and appraisal of the property.

Seller Carries a Second

Years ago, most real estate sales involved the seller carrying a note for some of his equity. That is now starting to come back as we see values increasing. What this basically does is allow you to get a conventional loan at 80% of the purchase price. This is the best type of mortgage as if offers the best rates. The difference 20% is your down payment and a small note the seller carries. This can be a great situation to get you in the home of your dreams.

The seller carried second can have a small monthly payment with a balloon in say 3 years. This gives you the opportunity to get in your new home and get some equity built up over the next 3 years before you refinance and pay off the sellers note.

You may be so excited about getting a new home that you go out and start buying all types of furniture. Unless you are paying for the furniture in cash, you need to hold off on this. You don’t want to open any lines of credit or make any large purchases until after your loan is closed.

It is critical that you have an understanding of No Money Down Mortgages when purchasing your first home. You can avoid being taken advantage of if you learn about all of the small details. There are a lot of little things you may not be aware of at first. The fees can add up and you want no surprises. The most important thing in getting a no money down mortgage or other mortgage options is to work with an experienced mortgage professional who has done many of these type loans and can walk you thru it. Give us a call with any questions you may have. 877-244-9190