I'm searching for a mortgage loan with NO MONEY DOWN. Is it possible? I am a 1st time buyer with a Ch. 13 Bankruptcy which is 6 years and 3 months since discharge. I have the money for closing costs, but no more than that. Can anyone help?
Yep, you can do it. I'm not going to quote rates at you because I'm not at work, but 100% financing is available with a mid FICO score as low as 580.
Thats great, I pulled my FICO from Equifax last night and it is 673. Any place in particular that I should apply? I'm obviously looking for the lowest APR. I found Bank of America doing 4.9 for a 15 year mortgage. But they only finance 95%.
Keep in mind that it's the middle score they go by. BofA has some first time homebuyers programs that go to 100% with a 660 FICO, but that also comes with PMI. The individual loan officer you work with is more important than the company he works for. Ask among your family, friends and co-workers for recomendations. Find out who they liked and why. Good luck!
Keep in mind that the FICO score you see is most likely higher than the one the lenders will see... Plus, you most likely dont' want to have any derog. listings on your report. I also would like to know what lenders would consider borrower with 580 score with 0 money down...sounds too good to be true.
Two months ago, I got a 100% loan with no PMI from Amsouth Bank. It also allowed me to roll nearly all of my closing costs into the financed amount, so that I paid a total of $104 out of pocket to close on the house. Fixed rate, conventional loan at 6.5%. Minimum middle score of 620. "30 year Affordable Housing Program"
Re: Re: Mortgage Loan - no money down Marci, where are you at and do they do business out of state? What about your derogs?
Re: Re: Mortgage Loan - no money down Marci, What was the loan amount? Also, is 620 your score or the score needed to qualify? Thanks, Willis
Re: Re: Mortgage Loan - no money down http://www.amsouth.com/personal/mortgage/housing.asp They do business in the southeastern states. My mid-score was 699 at the time; 620 is the minimum score needed to qualify. The loan amount was below $100K. No reserves were required. My derogs (from their trimerge) was 3X 30 day lates on one account, the most recent being 2000, and 2X 30 day lates on another account, the most recent being 1999. I had to write a brief letter of explanation that the derogs were oversights on paid accounts, over three years ago, and that such oversights would not happen again. The good news is that only one credit report inquiry was made, in spite of the trimerge. They pulled a trimerge through Experian. The inquiry only showed up on Experian. I will say this - I got a phenomenal rate for what I was asking in terms of the bank's risk, so I am pleased with the loan. But if I had to do it over again, I would tell someone who wanted to keep the home for a long time to get a 5.8% rate with PMI or do an 80 (5.5)/20 (7.0) without PMI. It also helps to have a decent loan officer; mine did not force me to pre-pay the appraisal or credit report fee.
Re: Re: Re: Mortgage Loan - no money down helpwanted: I don't think you'll have a problem, I just did 100% with Wells Fargo last July with a BK 13 on file. One question...if your BK 13 is over 6 yrs since discharge, why is it on your reports still? It should only be seven years from filing date and if you had a 3 or 5 year plan, it should have been erased at the most 4 years after discharge.
It can be done. I can do it, I'm sure Fla-tan and the other mortgage lenders that visit this site can do it too, as well as any broker. One way to do it would be to go FHA and use one of those gifting programs, Nehemiah, Ameridream, or one of those clones that has the net effect of getting the seller to make the down payment for you. Not every lender will do these programs and there is a good chance they are on their way out, but for now it's still an option. If for whatever reason you can't do FHA, there is still sub-prime that will go to 100% on a purchase with a 580 FICO. This will not offer the best of terms, probably 8% on a 2/28 with points and a prepayment penalty, but it will get you into that home. I personally would want to counsel a customer before they took this option, see if they can't hold off on the purchase while they got their finances in better shape, but sometimes it is the right choice.
Re: Re: Re: Re: Mortgage Loan - no money down I went with those terrms because I didn't understand how a blended rate 100% loan was actually cheaper than a single 100% loan. No one explained it to me (until I read willtygart's post below) and I didn't have the foresight/wisdom to ask. I was a bit scared of the high rates quoted to me on the 20% side, so I missed out. It pays to be educated. Even still, I am happy. I got a historically decent rate and the house I wanted in a timely manner. I also got the best possible rate for the program I applied for; all the others were 7%+, easy with prepay penalties and balloon payments required. Also, if you choose to do a single loan, it is better to take the 5.8% WITH PMI rather than a higher rate without PMI, because you can drop the PMI when your house reaches 80% LTV. And since it is conventional, you don't have to pay the principle down to reach 80% LTV, as you have to do with FHA. Finally, if you know that you're going to move within 7 years, you should consider an Adjustable Rate Mortgage. That's a nice way to pay down the principle fast and refinance/sell with a decent amount of equity. This is a great thread re the benefits of 80/20 and you should go to this forum to ask "willtygart" your questions. He's great. http://www.creditboards.com/phpBB2/viewtopic.php?t=1283 Finally, on gifting programs Ameridream and Nehemiah and Buyer's Fund, etc.... If you qualify for a 100% loan, it is cheaper to raise the purchase price by the amount of the closing costs and have the seller "pay" the closing costs rather than funneling it through the gifting program. Those programs cost money just to use them; one would have cost me an extra $1500 in closing costs just for using it. Also, the contract language gets a bit convulted which can scare off a seller (my initial contract scared off the seller). All the seller (should) cares about is the bottom line or net profit. Most don't care how the bottom line is reached, as long as it is what they expect it to be. So, as long as you aren't exceeding the appraisal amount, I would suggest that you raise the purchase price to cover closings AND prepaids (complete settlement) and have the seller in the contract "pay" those costs. Usually the lender have a cap as to how much the seller can pay (i.e 3 - 6% toward closing). Also, I got my loan officer to reduce his origination fee to .625% and agree to finance some prepaids that they normally like to see the buyer pay before the loan closes. So, I got a higher rate than what I could have by doing an 80/20, but I also saved a lot of cash that I otherwise would not have had. I just need to have that cash make a lot of money for me in a fund to offset the 0.3-0.4% loss in interest I took. Post your questions to willtygart at www.creditboards.com. He will be able to guide you through some important questions. Hope this helps,
Re: Re: Re: Re: Mortgage Loan - no money down Marci, Thanks again. I will check out creditboards to see what I can learn. Willis
Re: Re: Re: Re: Re: Mortgage Loan - no money down Marci, you should get into lending. You're a natural. There are some pretty cool new products in the market where you can pay a higher rate to avoid PMI, but then the rate comes down as the LTV comes down. You can have your cake, and eat it too. Not just if you're going to move. Statistically, the average new home buyer refinances within two years of the purchase. An ARM can save you money even if you don't move. I've visited there often, and I agree. And this is the only part where I disagree with you. Gifting programs are for when the seller is not allowed to contribute to the buyers down payment/costs. If the seller is allowed to pay these directly, there is no point to the gifting program. I don't advocate gifting programs. They are an option, some people use them. They are a loop-hole that may or may not be closed in the near future.
Re: Re: Re: Re: Re: Re: Mortgage Loan - no money down Thanks. I just post these things to inform people on what's out there. I was unaware of this. Do you know who offers these programs, and their names? I don't disagree with you. We are saying the same thing. I should have been clearer that if the seller can pay closing, don't do the gifting program - but people need to check with their loan officer/consultant first. I should (for Willis and the original poster) add that my loan is a "non-conforming" 30 year conventional loan. It will never be sold on the Fannie Mae secondary market and Amsouth will always service it. IMO, this is a good thing because it reduces the chance for mis-applied payments and credit report messiness that comes from loan transfers.
Re: Re: Re: Re: Re: Re: Mortgage Loan - no money down Marci, Thanks for adding that. I never knew that could be a problem. Also, creditboards will be very useful. Now, I have to decide how to balance my time between c-net and c-boards Willis
