Zero Down

Zero down programs allow you to buy your home now, instead of waiting to save enough for a down payment.

There are several options available for buying a home with zero down.

Get one new loan at 100 percent loan-to-value (LTV). PMI is usually required, and the insurance charges are not tax deductible.
Get an 80 percent first loan and a 20 second (piggy-back or 80/20) loan. This program does not require PMI, and all interest is tax deductible.
Get a new first loan and have the seller carry back a second loan for the balance of the purchase price.

Some zero down programs allow you to borrow 3 to 7 percent of the purchase price to pay your closing costs. Ask your loan officer if you qualify for any of these programs.

PMI is an additional charge you pay if you make less than a 20 percent down payment. This insurance policy protects the lender in the event of a payment default or foreclosure, and the loan is not paid off in full. The PMI payment ranges from 0.19 percent for a fixed rate loan with a 15 percent down payment; up to 1.09 percent with zero down; and as high as 1.34 percent on a zero down variable rate.

Zero Down programs may enable you to buy a home now, but just like any other big decision you make, you need to be aware of the parameters of these programs, as well as the lender guidelines as to whether you are eligible for such programs.

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FORMULA Mortgage & Realty, Inc. -
Office Phone: 310-734-6925

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Licensed in the following states: CA

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