Zero Down Mortgage Loans

Definition

A zero down mortgage loan is a mortgage loan that allows borrowers to finance a home's entire purchase price instead of only a percentage of the purchase price. In other words, zero down mortgage loans do not require a down payment. If you bought a home for $150,000.00 and financed it with a zero down mortgage loan, the loan would be for $150,000.00. There are many different zero down mortgage loan programs available in today's market, including both fixed rate zero down mortgage loans and adjustable rate zero down mortgage loans.

Zero down mortgage loans typically have higher credit requirements than regular mortgage loans, because there is a higher risk of default (foreclosure) with a zero down mortgage loan than there is with a conventional mortgage loans. However, there are many different types of zero down loan programs available today including zero down mortgage loans for those with perfect credit and zero down mortgage loans for those who have some credit issues.

Key Points

  • Zero down mortgage loans are mortgage loans that are issued for the full value of a home, so they do not require the borrower to make a down payment like regular loans do.
  • Zero down mortgage loans tend to have stricter qualifying guidelines than regular loans.
  • Zero down mortgage loans have similar interest rates and monthly payments to regular mortgage loans.

  • Zero down mortgage loans are available with both fixed interest rates and adjustable interest rates.

Pros

  • There is no need to spend money on a down payment with a zero down mortgage loan, because a zero down mortgage loan allows you to finance a home's entire purchase price.
  • Although zero down mortgage loans do not require a down payment from the borrower, they have similar interest rates to conventional loans.
  • There are many different zero down mortgage loan programs available in today's marketplace, including zero down mortgages for those with perfect credit and zero down mortgages for those with some credit issues.

Cons

  • Zero down mortgage loans have stricter qualifying guidelines than regular mortgage loans, so not everyone will able to qualify for a zero down mortgage loan.
  • As with all specialized mortgage loans, there are fewer options with zero down mortgage loans than there are with conventional mortgage loans. So conventional mortgage loans may work better in some situations than zero down mortgage loans.

Summary

Zero down mortgage loans are specialized mortgage loans that are issued for the full price of a home. They allow borrowers to free up money that would have gone towards a down payment with a conventional loan and use it for other things. Because zero down mortgage loans have a higher risk of default than regular mortgage loans, they also tend to have stricter qualifying criteria. However, zero down mortgage loans have similar interest rates to conventional mortgage loans.

Zero down mortgage loans are a great tool for people with good credit and little money available for a down payment to get into a home. Zero down mortgage loans are also great for people who would rather spend money that would have gone towards a down payment with a conventional loan on something else. Finally, there are many different zero down mortgage loan programs available today, including both fixed rate zero down mortgage loans and adjustable rate zero down mortgage loans.

If you're interested in applying for a zero down mortgage loan with Arizona Mortgage Group, simply complete our Quick Application. One of our loan originators will then call you within 1 business day to answer any questions you have and get you started.

Calculators

Mortgage Calculator
Our mortgage calculator can calculate principal and interest payments, calculate total monthly payments and display an amortization report.

Refinance Calculator
Our refinance calculator can calculate whether it would save you money to refinance your existing mortgage loan (s).

Local Information

We specialize in loans for borrowers in the greater Phoenix metropolitan area. Click a link below for more information about a particular town:

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