100% Financing Or No Down Payment & Bad Credit Mortgage Loans

Sub-prime lenders now offer financing packages with zero down. Interest rates are higher in this type of loan, but make it easier to buy a house. And unlike a conventional loan, there is no private mortgage insurance required. There are two types of zero down mortgage packages, each with their own needs.

Zero rates on loans

100% financing, as its name implies, offers complete financing of your property. The other option, 80/20, finances your mortgage with two loans. Both types of loans can be transported by the lender, but sometimes the seller or a second lender is required to carry the mortgage of 20%.

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

Qualifications For Zero-Down

Each lender has its own criteria for determining who qualifies for a zero down loan. Most sub-prime lenders require bankruptcies or liens that have been at least twelve months ago. A conventional loan requires these to be discharged two to four years ago.

While a credit score of 600 or more is best, large cash reserves can also qualify. It is worth six to twelve months of cash reserves in savings, money market, or other liquid assets are considered ideal.

If you choose 80/20 financing with the seller carrying the second mortgage, you can qualify with sub-prime lenders with a score of 560.

Zero-Down Sub-prime lenders

You can find zero-prime mortgages with both conventional and niche sub-prime lenders. Make sure you request quotes from mortgage lenders, and many can be sure to find the lowest rate and best conditions.

Also need to decide what type of mortgage you want. A mortgage is easier to qualify for and has lower rates. A fixed rate mortgage offers the security of a constant interest rate over the life of your loan.

Normally, a mortgage will be much better if you refinance within a couple of years. After you have improved your credit history, you can refinance a conventional mortgage with low interest rates.