There are some circumstances in life that we accept as a matter of course. You can’t use acell phone in a hospital. If you’re on a flight that’s about to land, you have to return your tray table to the upright and locked position–or the pilot will crash the plane. And if you’re buying a house, you’re going to have to come up with a down payment equal to 20 percent of its market value. But did you know you could actually qualify for a zero downhome loan instead?
A zero down home loan can be an intelligent choice in many instances. If you want to buy a house in an expensive area, it might take you years to save up for a down payment of 20 percent. Meanwhile, you’re wasting money on rent, and possibly missing out on low interest rates. With a zero down home loan, you can lock into a favorable rate–although a loan of this type will have a higher interest rate than a traditional mortgage.
A typical type of zero down home loan is the 80/20 loan. This includes a loan for 80 percent of the abode’s value, plus a 20 percent home equity line of credit. With this loan, you will still need to pay a small percentage fee–around 1.1 percent. While zero down home loans can save you from a large down payment, there are other costs to consider, such as private mortgage insurance and the above-mentioned higher interest rate.
Buy Your House Today with a Zero Down Home Loan
Zero down home loans are easier to find for less expensive properties, thanks to the Community Reinvestment Act–a directive that focuses on low to moderate income borrowers. However, there are some “jumbo” loans available if needed. Why waste years–and thousands of dollars of rent–while you sweat and save for a down payment? You can grab the brass ring and buy your house today with a zero down home loan. Unfortunately, the next time you fly, you still have to put away your tray table.