Zero Percent Downpayment Loans

Zero Percent Downpayment Loans

When a lender offers a no down payment mortgage loan, they are financing 100% of the purchase price for your new home. The first loan is normally for 80% of the purchase price and the second loan is normally for 20% of the purchase price. This will provide 100% financing for the total purchase price. This does not include costs. The seller can pay the closing costs if they are negotiated into the contract or the buyer can pay the closing costs out of pocket.
The benefit to financing 100% of the purchase price is to leverage your assets by not putting money down and to avoid mortgage insurance by splitting the mortgage into two. There are a number of costs and factors associated with mortgages, whether they’re zero down mortgages or more traditional.