Columbus Ohio Real Estate Experts

Are Zero Down Loans a Good Idea?

Zero down home loans were the cause of many of the subprime mortgage issues that we had about 10 years ago but nevertheless, they are still available in the form of a USDA loan.

These loans are backed by the US Department of Agriculture and is part of the Rural Development Guaranteed Housing Loan program. These loans are available to homebuyers with average to below average credit scores and are a good option for zero down home loan. These loans offer reduced mortgage insurance premiums as well and below-market mortgage rates. So, why wouldn't they seem like a good idea?

These USDA loans are for non-city dwellers. These homes must be in specific areas surrounding cities but not within a city. This means that only certain neighborhoods, communities, and regions are eligible for a USDA loan. Don't let this turn you off, however, because there are lots of homes that fall into this category. The home must meet the location requirements and borrowers must meet income eligibility requirements as well.

The benefits to a USDA loan besides the no down payment perk, is that they have low annual mortgage insurance fees, typically just .35% annually. This is lower than an FHA loan. There are upfront fees as well which is about 1% of the loan amount compared to FHA's 1.75% upfront fee.

USDA mortgages are also available to higher mortgage limitations whereas FHA, VA, and conventional loans are lower. They are available as a 30 year fixed mortgage only, which can be the downsize, especially if you plan on going with the shorter term mortgage.

Other options for zero down mortgages include a VA loan. This loan is from the Department of Veterans Affairs and is available to most active military personnel and veterans nationwide. VA loans are made through private lenders and are guaranteed by the Department of Veterans Affairs and they do not require any mortgage insurance. Better yet, sellers tend to pay most of the closing costs with the VA loan however, you do need to be an active military personnel or veteran to qualify.

Other downsides to a zero down loan? Besides having limitations on where you can purchase a property, really the only limitation is the mortgage insurance, which as I stated before, is not that expensive. This might be a great option for those that just can't pull together a large down payment for a home.

If you are interested in learning more about zero down home loans feel free to call our office at any time. We have lenders on call that would be happy to answer any questions you might have and I can give you a complete list of homes that would meet the search criteria for a USDA or VA loan in the Columbus area.

I originally posted this on Linkedin here: https://www.linkedin.com/pulse/should-i-try-zero-down-loan-donald-payne?published=t

columbus, lewis center and gahanna real estate

Columbus Ohio real estate - Vision RealtyAs a certified RealtorĀ® for the top-rated Columbus Realty Firm - Vision Realty, with 32 years of dedicated real estate experience, I can help buyers, sellers, investors, short sale sellers and more find, sell or invest in the right property, at the right price, at the right time. Contact me anytime for updates and information on the Columbus OH Real Estate market.

Ā 

Donald Payne - Vision Realty, Inc.
4608 North High Street

Columbus, OH 43214

Toll-free: (866) 510-2223

Cell: (614) 323-4348
DonaldPayne@VisionRealty.com
Follow Me on Pinterest

LinkedIn Donald Payne Twitter Vision Realty - Donald Payne Vision Realty on Facebook Vision Realty YouTube Listings Vision Realty Columbus OH real estate search
Comment balloon 2 commentsDonald Payne • April 20 2017 02:27PM
Are Zero Down Loans a Good Idea?
share
Zero down home loans were the cause of many of the subprime mortgage issues that we had about 10 years ago but nevertheless, they are still available in the form of a USDA loan. These loans are backed by the US Department of Agriculture and is part… more
How to Buy a House that's Not on the Market
share
Inventory across the country in hot markets is getting quite low. This is causing a lot of buyers to get creative with their offers and they're buying strategies. This also might be looking at homes that are not on the market. How can you buy a… more
The Main Reasons 'For Sale by Owner' Doesn't Work
share
Now, before I lose you completely because of course, I'm a real estate agent telling you why you shouldn't sell your home yourself, stick with me a little while into this article. A lot of people try to sell their own homes and while it can be done,… more
Advantages and Disadvantages to Selling FSBO
share
There are a lot of homeowners that choose to sell their home themselves. There can be pros and cons to this and it's important to understand both of them before you jump into the real estate market in a DIY sale. Advantages: You won't have to pay a… more
Should You Really Buy a House in an HOA?
share
Many people don't think through all of the possibilities, problems or advantages to a homeowners association or HOA. Most new subdivisions or developments will have some association but homeowners are required to pay into and abide by laws if they… more
Great Ways to Reduce Your Debt to Qualify for a Home Loan
share
It's no secret that having a low debt to income ratio is a good way to get a great loan and a great rate how do you reduce your debt without piling on anymore? Here are 6 great ways to lower get rid of your debt completely. #1. Don't neglect… more
Why Do Buyers Wait for Spring?
share
Spring is right around the corner; I can feel it, can't you? Okay, maybe you can't where you are. Maybe you are still buried under several feet of snow. I know that a lot of the country has seen crazy weather this year and it has certainly kept… more
Are You Emotionally Ready to Sell Your House?
share
You can read hundreds of articles about how to prepare your house or property for listing, marketing, and sale but that can be completely different from preparing yourself for the sale of your home. We can talk ad nauseam about how to create the… more
How to Buy a House with Student Loans and Debt
share
The way society is going, more and more adult children are staying in their parent's houses until they are 25 and even 30 due to the fact that they have student loans and debt that needs to be paid off. Because of this, many young people or first… more
Added Protection for Ohio's Real Estate Transactions
share
Good Funds Legislation for Ohio was signed into law on January 4, 2017, and will take effect April 6, 2017. This is a consumer protection statute designed to protect against fraud and to preserve the integrity of the consumer's funds that are held… more