The Zero-Down Mortgage

Do you qualify for a ZERO-DOWN MORTGAGE?  Here are details on two Government-backed, zero-down mortgage programs that may work for you.

Rural Housing Loan Program

This program is aimed at low to moderate income households.  It is backed by the U.S. Government and can be taken out for as much as 100 percent of the appraised value of a property.  The qualifications include living in a rural area of the United States and demonstrating that you lack adequate housing right now.    To find out more details, visit the USDA website for income and eligibility information.

VA Loans

If you or your spouse is a veteran, a member of the reserves or active duty, you may qualify for a VA loan.  This loan is backed by the U.S. Department of Veterans Affairs and allows borrowers to receive up to 100 percent of the appraised value of a property.  There are certain service requirements to determine eligibility and you need to have enough income to afford the mortgage payment.  For more details and to see if you are eligible for a VA Loan, visit the Department of Veterans Affairs website.

No Closing Cost Mortgages

If closing costs are keeping you from obtaining a mortgage, you may want to consider a no-closing cost mortgage.  Closing Costs include such things as the loan origination fee, appraisal fee, title insurance fees, prepaids and other various fees. However, there are pros and cons to this type of loan. 
No-closing cost mortgages are attractive to borrowers who don’t have the cash to pay those fees up front and want to roll closing costs into the loan. These types of loans also make sense if you don’t plan on staying in the home more than five years.  With a traditional mortgage, it could take more than five years to recoup the closing costs. 

However, you will pay a higher interest rate with a no-closing cost mortgage.  Here’s an example of two choices on a $150,000 loan, one with a rate of 4.125 percent with $6,000 in closing costs and one with a rate of 4.625 percent and no closing costs.  Going with the no-closing cost option means you’ll pay more than $15,000 in additional interest on a 30-year loan.

Definitely check with your lender on which option is best for you.  Right now, interest rates are still at incredible lows. It is a great time to buy!