Loans
Purchase Your Dream Home With No Down Payment!
by Sandra Martinez Herranen

Saving for a down payment is difficult. For example a standard 5% down payment on a $400,000 home is $20,000 and that's without closing costs. Lack of a down payment is a major obstacle for many potential buyers, who feel that they will never be able to attain the benefits of home ownership. But there is a solution.

With the introduction of alternative lending in the past 10 years, innovative guidelines have been created. This has allowed for new types of loan programs to be offered. Among those programs now available is 100% financing, which has made it possible for countless to purchase a home with no money down. It has opened the doors for many who could not qualify with the traditional rules of lending. Here are some of the highlights:

• No down payment required
• Available for first-time homebuyers
• Credit scores as low as 600 are eligible
• No verification of rent or mortgage required
• No cash reserves required
• Up to 50% debt to income ratio allowed
• Seller may pay 3% of non-recurring closing costs
• No mortgage insurance required

For those of you whom are self-employed or have extra "cash" income, we also now have limited income verification 100% financing. With this type of loan we verify you do own a business or are employed but without reference to tax returns or pay stubs. Credit scores must be at least 660 for this type of loan.

Unlike paying rent, which only benefits your landlord and his mortgage, when you own a home, every payment you make goes toward your home and are YOUR tax advantage. On a $400,000 home your payment including tax and insurance could be $3009 a month. Taking into consideration your tax benefit, your adjusted new mortgage payment would be $2422 a month! The tax savings would equal $587 a month! For many first time homebuyers that savings can mean the difference from just qualifying to actually being completely ready and capable to take on the adjustment in housing cost.

So with so many ways to qualify, interest rates at a 40-year low and so little money needed (only need funds to cover closing costs), now is the time to make your dream of owning a home a reality. Even if your credit is less than perfect it is wise to meet with a Mortgage Consultant to analyze your situation. Buyers with past credit problems including bankruptcies and foreclosures may still qualify to buy a home with no money down. Even if you are not ready to purchase a home right away, a Mortgage Consultant can put you on the right track, gearing you up for homeownership in the near future.

The options are endless and the time is right to buy a home. Take hold of these opportunities to make your dream of owning a home a reality.

Sandra Martinez Herranen of Santa Cruz Mortgage can be reached at 831.425.7880 or by email at sandra@santacruzmortgage.com.