A no-down payment mortgage allows the borrower to purchase a house without putting any money down. In cases like this, the creditor is actually financing 100% of the home’s cost. Although this kind of home mortgage is often hard to come by, a no-money down mortgage remains an alternative for people who meet the prerequisites.
Army Personnel
Applicants who qualify for a home loan application available from the Veterans Administration (VA) can purchase a house without a down payment. If you are a U.S. veteran, a surviving spouse of a veteran or are currently serving on active duty in a branch of the U.S. military, you might be entitled to a no-money down VA loan to purchase an in-house home. Townhouses and condos situated in VA project complexes qualify for down VA mortgage financing.
High Credit Rating
The 80/20 combination mortgage is an alternative that allows people to buy a house without a down payment, according to Bankrate.com. This kind of financing requires that borrowers execute two separate loans, one for 80 percent of their cost and another for the 20 percent that would ordinarily represent the down payment. First-time homebuyers using a credit score are generally prime candidates for an 80/20 mortgage loan. For homebuyers that have great credit, always pay their bills on time, and have a decent monthly income to take a loan, but not enough money saved for a down payment, the 80/20 loan combo is a great alternative. Homebuyers generally have to pay a higher rate of interest on the second loan, however, the mortgage interest on both loans is tax deductible. Are expected to cover the closing costs associated with getting the loans.
Proof of Earnings
Borrowers applying for down mortgage financing are required to provide lenders until they can qualify. Lenders normally ask to see an applicant's bank statements for the last two months, pay stubs for the last 3 months, and W-2 forms and tax returns for the last two years. Lenders may request to see other evidence of income and resources. The debtor must also provide the lender permission to request a copy of his credit file, which can be employed as a sign of his ability to pay off the loan. Many lenders require a FICO score of 680 or greater while creditor requirements change. Some lenders require a borrower have a 720 FICO score that is minimal to qualify for a down home mortgage loan. Lenders often affirm a borrower's employment history whether he has been employed at the same job for the last two years.