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No-Down-Payment Mortgages Gone for Good? No - There are options available.
By robertearl | April 15, 2008
“While Fannie Mae and Freddie Mac still have products that allow borrowers to finance 100% of their home purchase (albeit at a higher cost), recently the major private mortgage insurance companies have backed off from insuring these loans, said Bruce Brown, a certified mortgage planning specialist with First Security Mortgage Co., in Kansas City, Mo. Mortgage Guaranty Insurance Corp. (MTG), for example, changed its guidelines last week to exclude coverage of 100% mortgages. At a minimum, borrowers need a 3% down payment and a credit score of at least 680 to be eligible for coverage. In selected markets… a 5% down payment is the minimum required.”
That said, while the conventional no-down-payment products may have disappeared, there are still ways to buy a home without a down payment. You have to broaden your definition of no-down payment. There are loan options available, if not in the form they were in before.
A gift from a family member or a community grant can take the place of a down payment. And down-payment assistance programs are available to help those seeking loans backed by the Federal Housing Administration.
Topics: Buy a Home, First Time Buyer, Northern Virginia Real Estate, Robert Earl |