No Money Down Mortgages

If you have been contemplating purchasing a home, but feel stuck because you have no down payment for your mortgage, there are many solutions available for you.

In the past, homebuyers without the necessary down payment would have to buy expensive Private Mortgage Insurance. There are now many mortgage options that will get you approved without this insurance.

The 80/20 home loan plan will help you afford a home without the PMI insurance. The plan is actually two home loans that will cover 100% of your home’s purchase price. Your first mortgage will cover 80% of the purchase price, and the second loan (from a different lender) will cover 20%. When you structure the loan in this manner, your primary lender will not require you to have PMI insurance.

If you have less than perfect credit, the 80/20 home loan plan is a great solution. With the plan, you may be able to qualify for a better interest rate. When you have the necessary down payment (from your 20% loan) you will qualify for an interest rate of 2 to 3% less than you would normally. Keep in mind that you interest rate from the second loan will be slightly higher than the one with the first. This is because your second lender is assuming more risk by financing you.

Keep in mind that when you have an 80/20 plan, you will have two monthly payments. It’s important to budget carefully because if you get behind on either loan, lenders can take your home. Before you make the final decision on your 80/20 plan, make sure to shop around. Find the most competitive interest rates for both loans before you purchase. This will help you save money on your mortgages in the long run.