Zero is the happiest of numbers — when you’re applying for a down payment mortgage. The ability to purchase the home of your dreams without having to offer a hefty initial total (often up to 20 percent of the purchase price) is one you crave. There are complications with this notion, however, and future buyers must be aware of them:
Zero Down Now, Endless Fees Later
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Greater Monthly Sums
Too often is the idea of a zero-down loan considered to be a blessing. Too often, however, is that same blessing shattered in the wake of the first monthly payment. While no funds are required for purchasing, all subsequent demands will exceed those of a traditional loan. This is because lending institutions must be compensated. They will therefore charge more for the mortgage, putting a strain on individuals and their finances.
Fewer Purchasing Options
The zero-down loan does exist. That existence is simply marred by limitations — with few banks willing to offer grand totals to clients. And this can often lead to complications: such as fewer home options. Without the trust that typical down payments provide, organizations will only grant meager capital. This will severely tame an individual’s ability to search for the perfect property later.
The quest for a loan free of the usual demands is a noble one. Nobility isn’t enough to prove that individuals are worthy of it, however. Financial institutions are — understandably — wary of offering this. They therefore force potential clients to go through a rigorous screening process: with credit examined and lifestyles questioned.
The zero-down payment loan is a value… if an individual can meet its many requirements.