Mortgage loans with 100% financing or without advance and with bad credit

Sub-prime lenders now offer no-down payment financing packages. Interest rates are higher on these types of loans, but they make buying a home easier. And unlike a conventional loan, private mortgage insurance is not required. There are two types of no-down payment mortgage packages, each with its own requirements.

Zero loan types

100% Financing, as the name implies, offers full financing of your property. The other option, 80/20, finances your mortgage with two loans. Your lender can make both loans, but sometimes the seller or a second lender is required to carry the 20% mortgage.

100% financing is easier to handle, but not all lenders will offer this type of home loan. 80/20 financing is more common, but requires some negotiation if the seller is involved.

Qualifications for Zero-Down

Each lender has their own criteria for determining who will qualify for a no-down payment loan. Most subprime lenders require bankruptcies or foreclosures to have occurred at least twelve months ago. A conventional loan requires that these be paid off two to four years ago.

While a credit score of 600 or higher is best, large cash reserves can also qualify you. Six to twelve month cash reserves in the form of savings, money market, or other liquid assets are considered ideal.

If you choose 80/20 financing with the seller who has the second mortgage, you can qualify with subprime lenders with a score of 560.

Zero-Down Subprime Lenders

You can find subprime mortgages with no down payment with conventional and specialty subprime lenders. Be sure to request quotes from as many mortgage lenders as possible to ensure you find the lowest rate and the best terms.

You will also want to decide what type of mortgage you want. An ARM is easier to qualify for and has lower fees. A fixed rate mortgage offers the security of a constant interest rate for the life of your loan.

An ARM will generally be a better deal if you plan to refinance in a couple of years. Once your credit history has improved, you can refinance a conventional mortgage with low interest rates.

To see our list of recommended subprime lenders online, visit this

page: Recommended bad credit mortgage lenders.

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