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No down payment
mortgages are offered either as single 1st mortgages or
combination 1st and 2nd mortgages, sometimes called 80/20 or
piggyback mortgages. The 80/20 option (an 80% 1st with a 20%
2nd mortgage) is often chosen because 100% loans
often require mortgage insurance and have a higher
interest rate than the two rates of an 80/20 when blended
together; so the monthly payment is
usually lower than a single 100% loan.
Borrowers with credit problems often qualify:
- Fico score must be 580**
or above,
- Debt ratios of 55.49%
or less,
- Property bought or
refinanced must be borrowers primary residence.
**Many of our lenders work with borrowers with credit
scores below the minimum to correct credit report inaccuracies which may lift
scores above the required minimums.
The advantages of zero down financing are:
- Of course, no money
needed for a down payment,
- Cash can be used for
other needs,
- Borrower may wish
larger financing for tax deduction purposes.
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