Question
Can you please tell me more about the zero down option on the mortgage loan program?  which types are they, what kind of credit score does it allow for?

Answer
There is a lot of information regarding “zero down” mortgage programs. There are some great programs backed by Fannie Mae and Freddie Mac (these are the 2 government backed giants that control the industry) with great interest rates and credit requirements that don’t have to be sterling. Unfortunately, the poorer your credit score, the fewer options you have.

I’ll give you an example: a borrower could have a 650 credit score and qualify for a “zero down” program backed by Fannie and Freddie. The rate would be approximately 6.5%.

However, here’s another example: a borrower could have a credit score of 580 and no longer qualify for Fannie and Freddie but would be able to obtain 100% financing with well respected, publicly traded (NYSE or NASDAQ) companies. But the rate would be higher.

Be careful of one last item. Don’t let companies fool you with “zero down” vs “no closing costs”. They aren’t the same. Closing costs are things like taxes, lawyer’s fees, appraisal fees… Zero down refers to the amount of the loan itself. Sometimes, you can get seller’s to pay for your closing costs and there are many options available.