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No Down Payment Loan - Key Elements And Benefits Of A No Down Payment Loan

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A no down payment loan can be your answer to being able to buy that dream home you’re crazy about. In some situations, a no down payment loan may be your only way to obtain a mortgage. The most common reason for such a type of loan is not having enough funds to deliever as a down payment at the closing table. This is incredibly common for many would-be home buyers.

Being successful at obtaining a no down payment loan is a lot easier than you may think. Yes, it is a slightly unusual modality for securing your loan, but over time it has proven to be very effective for individuals who simply cannot purchase a piece of property any other way. Not having to put a down payment on a loan frees up cash for other purposes, such as starting your own business or funding you child’s college education. Other benefits of saving on the money for a down payment include keeping that money to use for other obligations such as paying your taxes or paying down your debt.

The “normal,” traditional method of buying a home or property is to put down 20-25% and finance the rest. But there are many no money down programs out there that allow you to carry more debt. There are VA loans, where a veteran is entitled to a 100% no money down loan. There are many lenders who offer no money down loans in addition to their traditional loan programs. The FHA is another viable program you can look into when considering no money down or low money down transactions. Some sellers also will “carry back the mortgage.” This means you can purchase their home with a small second mortgage for the amount normally used as a full, upfront down payment; a true no money down deal.

One key element that is crucial to obtainig a zero down loan is that lenders require you to possess good credit. You don’t have to have excellent credit, but bad or poor credit won’t cut it, unfortunately. The terms of these zero down loans vary just like other loans. They can be traditional 30-year fixed, 15 year, fixed-rate mortgages, or even 5 year Adjustable Rate Mortgages (ARMs). Research manifests these loans can even be more than 100% no money down. Some lenders are out there that offer up to 103% loan to value (LTV) ratios; this means you can do even one step better than no money down and actually receive money back, cash, at closing. One real estate guru and entrepreneur who goes into detail about such loans is Carlton Sheets. For years now, he’s been offering his advanced, no money down real estate programs exclusively on TV.

Requirements vis-a-vis documentation of no money down loans are often tantamount to the exhaustive documentation required of traditional loans. With the flexibility and cash savings provided by these alternative, no money down loans, you’ll still need to document your income and assets. You’ll need your W2s for the last two years, at least your last two pay stubs, proof of any social security pension income or disability income, alimony (if any) verification in many circumstances, plus two years signed 1040s. And if you own a business, lenders’ll also require submission of your last few years business tax returns as well as your business financial statements, such as your income statement.

Moreover, your assets will need to be verified for no money down loans. Lenders will require looking at your bank statements, your stock and bond equity portfolio statements, information on your 501 (k) and IRA, as well as documentation listing any real or personal property you own, such as other homes, businesses, cars, boats and jewelry. Lenders of these types of loans also want to know exactly what your liabilities are, so you’ll need to present copies of a full year’s cancelled rent checks, front and back sides, as well as your credit report debts and any current mortgages and deeds you can manifest.

For these no down payment loans, you’ll also be required to show proof of identify, usually with a picture-ID, such as a driver’s license. Other fees involved in the process include appraisal costs, a mortgage broker’s fee (if you choose to use one to help you “shop” the loan), underwriting/document preparation fees, and attorney settelement fees. All are part of the overall closing costs of your no money down payment loans.

No Fax Cash Loan - Advantages of a No Fax Cash Loan [next] [back] No Credit Student Loan - How to Get the Best No Credit Student Loan

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