No down payment mortgage and its advantages

Posted by sarabro on May 11th, 2014

Are you planning to buy your dream house in a most cost effective manner? You must take full advantage of no down payment mortgage in combination with best mortgage rates. Buying a home is often the biggest investment decision you take in your lifetime. But arranging money for down payment and closing cost like taxes for transfer and legal cost becomes a challenge in buying your house even if you have a good credit rating and stable income. With no down payment mortgage and best mortgage rates, you can take advantage of minimum down payment while repaying the loan with minimum possible instalment over a longer period of time.

While buying a house, depending on the type of mortgage loan you apply for, you need to make a certain percentage of property value as down payment. In case of insured loan, it is minimum 5% of the property value. On top of this you also need to make an upfront payment of around 1.5% of the property value as closing cost. Considering the high property cost, this 6.5% of property value works out to be a substantial amount which one may find difficult to organise. This is when no down payment mortgage comes handy and often becomes one’s preferred choice.

All you are required to pay in the deal is just 1.5% of the property value on account of the closing cost. Most of the financial institutes offering the facility of no down payment mortgage loan will look for a good credit rating of the buyer. This rating requirement may vary from one financial institute to another. You can go online to check credit rating requirement before you actually apply for no down payment mortgage loan.

After having overcome the challenge of down payment through no down payment mortgage loan, you need to ensure that you do not lose out on the installment payout on your mortgage loan and this is where your search for best mortgage rates begins. Though this seems to be a fairly simple idea but it is worthwhile to spend time to search as even a very small percentage difference can make you save a huge sum in the long run. You should check online resources and websites of mortgage brokers in order to compare mortgage rates of various lenders.

Usually, all the best mortgage rates come with a set of terms and conditions which should be given due importance and mortgage rate alone should not be considered in isolation. Some lenders do not offer great conditions with the rate which may turn the mortgage loan costlier in spite of offering the best mortgage rates. For example, some lenders charge penalties for early repayment. Many borrowers plan to foreclose the loan as their income increases over tenure of repayment may find such penalty may negate the benefit of best mortgage rates.

Since mortgage loan is the single largest debt in one’s lifetime, it is important to do adequate research and studies in selection of the lender, best mortgage rates. You may search online for no down payment mortgage as well.

If you haven’t taken a no down payment mortgage cover, you must. Compare best mortgage rates online for the best coverage.