“I need money to get money” Zero Down Mortgage
- First time home buyers just starting out with no down payment.
- Students that have a strong cosigner.
- Anyone who has their cash assets tied up and therefore has no down payment.
Borrowers with excellent credit.
I thought that zero down payment mortgages were gone!
Government guaranteed zero down payment mortgages may be gone, but here at First Foundation, we are still able to offer
two ways one way for you to purchase a home with no down payment:
Gifted down payment: If you happen to have a generous family member or two, lenders allow you to use a gifted amount of money as your down payment. The person gifting you the money must sign a gift letter saying that you are not required to pay back the gifted money at any time (you must also sign the gift letter) and they must be a blood relative.
Flex Down: Flex Down is a program that lenders offer that allows you to borrow your down payment (something that, otherwise, would not be allowed). Common sources for borrowed down payment for the Flex Down program are personal loans, lines of credit or credit cards. One thing to keep in mind is that the loan repayments must be taken into account when qualifying for your mortgage, so it could affect the purchase price that you qualify for. You must also have a minimum credit score of 650* to be eligible for the Flex Down program.
How do I qualify?
For most of the zero down payment mortgage programs, you require a minimum credit score of 650. However, each program has its own specific guidelines, and the guidelines can vary from lender to lender.
One consistent requirement for any of the zero down payment programs (including a gifted down payment) is that you must be able to provide proof that you have 1.5% of the mortgage amount available to cover closing costs such as lawyer fees, title insurance, etc. It won’t necessarily cost that much – in fact, it rarely does. It’s just an indication that you’ve got a buffer in case of unexpected costs. Lenders don’t want to put you in a precarious financial position! These funds must be available in your account prior to your mortgage funding.