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100% Financing
Buy a home with no money down

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100% Financing
 
100 Percent Financing - Strong credit can get you into a house with no money down

In the past, it was difficult to buy a house without a significant down payment. Today, many lenders offer programs which allow you to buy a house with no money down.

There are certain risks and disadvantages involved in purchasing a home with no money down. Property values may drop and you can end up owing more than the home is worth. This potential negative equity can make it difficult to move if your finances or living situation changes. You may also receive a slightly higher interest rate with no money down.

The upside of a 100 percent home loan is that you can get into a house you normally could not buy. In the past, with rapidly rising home values, you could gain a significant amount of equity because of sky-rocketing home prices. This opportunity is lost if waiting to save for a down payment. In some housing markets, you can still gain equity, although at a slower rate than in the past. If you are buying a house for the long term, home ownership can be one of your best investments.

Another benefit of home ownership is the tax write offs associated with interest and property tax payments. For someone in the 30% tax bracket, a monthly $1000 rent payment is equivalent to a monthly mortgage payment of $1300 (These figures are for illustration purposes only). Additional savings can be factored in based on property tax payments in your area.

Some lenders offer a single loan for 100 percent of the purchase price of your new home. This type of program may force you to pay Principal Mortgage Insurance (PMI) which is not tax deductible. Other lenders offer a combination of loans, an 80 percent first trust deed and an 20 percent second trust deed. This type of combination loan may allow you to avoid PMI, but will have a higher interest rate on the "piggy back" loan. This higher interest payment may be tax deductible, so in the end, you may save money after the tax deductions are factored into your monthly housing costs.

If your home gains value (below 80% loan-to-value), these type of loans can be refinanced, lowering your monthy payment and avoiding PMI.

Get prequalified for a 100% mortgage from competing lenders.