Open Door Mortgage Group

Who are Zero Down Mortgages good for?

• First time home buyers just starting out with no down payment.

• Students that have a strong cosigner.

• Anyone who has their cash assets tied up and therefore has no down payment.

• Borrowers with excellent credit.

“I thought that zero down payment mortgages were gone!”

Government guaranteed zero down payment mortgages have been eliminated, but there are ways for you to purchase a home without a down payment:

• Gift Down Payment: Lenders will allow you to use gifted money as your down payment. The person giving you the funds must sign a gift letter saying that you will not be required to pay back them back at any time, and they must be a blood relative.

• Flex Down: Flex Down allows you to borrow your down payment. Sources such as personal loans, lines of credit or credit cards are all eligible. One thing to keep in mind is that the loan repayments are taken into account when qualifying for your mortgage, so it could affect the purchase price that you qualify for. 

• Cash Back: Using the Cash Back program, you receive 5% of your mortgage back in cash. To qualify you must have a 5% down payment, from your own resources, and upon funding the lender will give you up to 5% of your mortgage amount back. You can use the “cash back” for other expenses such as closing costs. However, the interest rate on a Cash Back mortgage is slightly higher than standard fixed rate mortgages. 

How do I qualify?

For most of the zero down payment mortgage programs, you require a minimum credit score of 650. However, each program has its own specific guidelines, and the guidelines can vary from lender to lender.

For any of the zero down payment programs, you must be able to provide proof that you have 1.5% of the mortgage amount available to cover closing costs such as lawyer fees and title insurance. It won’t necessarily cost that much, but it proves you’ve got a buffer in case of unexpected costs. Lenders don’t want to put you in a precarious financial position! These funds must be available in your account prior to your mortgage funding.

Contact us today to learn more about Zero Down Mortgages, and if they're right for you.