100% Financing AND No Mortgage Insurance: A Home Buying Strategy

   100% Financing AND No Mortgage Insurance: A Home Buying Strategy

 No down payment, 100% financing, no money down - these phrases are not often heard in today's mortgage environment.  Most mortgage professional are now touting FHA ,or 3% down.  There are two mortgage products that allow 100% financing and also eliminate the need for mortgage insurance.  One of my clients recently informed me that his attorney advised him that this was an impossibility.  Well, I'm here to tell you it is very possible, here's how.

VA Loans - 100% financing and No Mortgage Insurance

     A VA loan is a mortgage loan on approved property made to a qualified veteran.  It is backed by the U.S. Department of Veterans Affairs under its Home Loan Guaranty Program.  These loans have features that can make it easier for qualified veterans to get a mortgage.  For example, no cash reserves are required for loan amounts less than or equal to $417,000.  Greater than $417,000 only a 2 month cash reserve is required.  Mobile homes are acceptable.  This loan helps borrowers who have imperfect credit and low cash.

USDA Rural Development Guaranteed Loans - 100% Financing and No Mortgage Insurance

     Rural Housing loans are one of the best kept secrets in home finacing.  These loans offer low interest rates for those who buy homes in what is considered "rural" areas.  They are 30 year, fixed rate loans.  Home buyers must be US citizens or legal aliens with permanent status.  There are income limits and homes must be located in a rural area.  I provided links to a website that can help you determine if income and home location meet the guidelines.  One of the great features of this loan is that improvement costs can be included in the loan amount.

     This is very high level information on these two loans.  What is important is that you know these type of programs exist.  Contact me if you need specific details.

Photographs courtesy of Stock.xchng.com