It sounds like an oxymoron, but a closer look reveals that the Pennsylvania No Money Down Mortgage has joined the ranks of available plans for buying a home. Whether it is a100% with Personal Mortgage Insurance (PMI), a 2/28 or 3/27 loan or an 80/20 mortgage, PA No Money Down Mortgages can afford the reality of purchasing a home without a huge lump sum of cash needed with traditional home mortgages. Besides having to qualify for this type of loan, a few other particulars should be considered. Even though the time-honored 20% of the purchase price is not expected, the buyer will be paying the entire amount of the purchase price, plus PMI, as assurance to the lender in case of default on the loan.
Other types of the 100% PA No Money Down Mortgage are the more complicated 2/28 and 3/27, or ‘hybrid loans,’ which are set with either 20 or 30 year terms. Fixed interest rates are set for the first two or three years of the loan, while the remaining years will have adjustable interest rates. These mortgages are used especially when the homebuyer qualifies for a sub-prime loan or has a low credit score. An 80/20 PA No Money Down Mortgage is actually a combination of two separate loans, both for the mortgage of the house. No PMI is involved here, but since both loans are home loans, there will be two sets of closing costs and two monthly payments. With an 80/20 loan both loans may be from the same lender, but can also be from 2 separate lenders. Weighing the difference between double payments and one payment with PMI will be a deciding factor in which loan suits the buyer best.
Straight out 100% PA No Money Down Mortgages may carry higher interest rates than the hybrid loans or the 80/20 loans and impose PMI with the loan until a 20% home equity is achieved. USDA Rural Housing Loans, Veteran’s Administration (VA) Loans and the American Dream Down Payment Initiative are options for PA No Money Down Mortgages for homebuyers that qualify. Searching the web for information and choosing the right company will facilitate the purchase of that first home!
At Ivy League Mortgage Southampton, our dedicated and knowledgeable loan officers are available 24/7. Visit us online at www.ilmsouthampton.com and let us help to discover the best financing options for you.
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