Buying a first home has always been everyone’s dream. Many families are unable to realize their dreams due to little or no cash reserves. Buying a home involves having cash to make your down payment as well as closing costs. On top of this, the first time home buyer, understandably, may not know which loan program best fits his/her needs. Zero interest home loans for first time buyers do not mean that zero interest will be charged. With a large variety of home loans available, it is no wonder that the first time home buyers are a confused lot.
Working through an experienced mortgage broker may ease your way, through the labyrinth of the processes involved and the types of loans available.
Zero Down Interest Mortgage Rates
There was a time when people postponed buying their homes until they had adequate funds. As the real estate prices kept creeping up, they were increasingly unable to buy their dream homes. Today, several first time home buyers are taking advantage of the zero down interest mortgage rates loans.
First, you need to find the right mortgage lender. There are many mortgage lenders who only finance 80, 90, or 95 percent of the home price. This requires you to finance the balance 20, 10, or 5 percent of the amount. Zero down interest low mortgage rates mean the mortgage lender will offer you 100% financing, and very low mortgage rates. The low interest you pay on your zero down interest low mortgage rates loan is also tax deductible.
This enables the first time home buyers to achieve their goals of buying their first dream home. If you are still unable to pay the closing costs, there are mortgage lenders, who will be able to finance 103% or 107% loans. To avail of this you need to have a very high credit rating. To avail of a normal mortgage, first time home buyers need not have excellent credit rating. There are mortgage lenders who finance first time home buyers with bad credit or with a history of bankruptcy.
There may be one down side to the low interest mortgage rates loans. Some mortgage lenders may insist that you purchase a private mortgage insurance of the amount of the standard down payment. By doing so, you are considered less of a risk. When you reach 22% of the standard rate of equity, the mortgage lender is obliged to cancel your private mortgage insurance.
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