If you are homeowner with poor credit looking for 100% mortgage financing then you might be surprised to find that it is almost as easy to get approved with poor credit as it is if you had a good credit score!
There are many sub prime mortgage lenders who offer different 100% mortgage loan packages for homebuyers; in many cases you can find as much as 103% mortgage loans to include your closing costs. I know you are wondering how all of this works. Well, you have many different options when it comes to this type of financing; here is what you need to know to get started.
Advantages and disadvantages of 100% Mortgage LoansThe main advantage of a hundred percent mortgage loan is that you can get into a home with little or almost no cash down. You can stop wasting your money on rent and you can actually build equity in your own home.
The drawback of a 100% home financing is that you will pay much more for financing; higher interest rates with closing costs and the lender fees, they are all a part of this type of the loan. Since you are purchasing your home with zero equity, there is an increased risk for the home owner. Suppose that the economy starts taking a big nosedive and the value of your home also falls, you could end up owning more than total worth of your home.
There is another advantage of 100% mortgage loan. Usually you will not be asked to pay for mortgage insurance which can add hundreds of $$$ to your mortgage payments and it does pretty much nothing to secure the owner of the home instead, it only secures the lender.
You can find a number of options for hundred percent mortgage loans. Try to find a lender who is willing to finance the entire amount with only one mortgage. If you can find a deal like that then that would be the least expensive option for you.
You also have the option to finance your home using an 80-20 mortgage. Your 1st mortgage is for 80% of the total purchase cost, and you will use the 2nd mortgage for the remaining 20%. Ideally you can search for more information related to 100% mortgage loan on the internet and you should also try to find a lenders offering free quotes. It doesn't cost you anything. All you have to do is to compare between the quotes and go for the best offer. Be sure to check your contract before you sign it. Always check your contract, terms and conditions. It will save you a lot of hassle and you will be able to make an informed decision.