No Money Down-Is it true??

Does anybody know about the no money down mortgages. How do they work? Do you need to make a certain income to qualify? Sorry so many questions..me and DH are looking into buying either a coop or condo to start and I feel so lost.
Thanks
Kristy

I am not an expert, but this is what I understand about a no money down mortgage.
I believe it would cause you to have a higher interest rate and you'd have to pay pmi insurance. I think in order to get a no money down mortgage your fica score has to be high and your debit to income ratio low...
You can also roll the closing costs into the mortgage if you dont have the money to pay.
Maybe someone else on the board has more experience and can verify this.

i have never heard of 'no money down' mortgages, but i would be very hesitant getting involved w/ this type of mortgage.

it might sound good on the surface, but you have to realize that you will be paying more in the end (interest).

The mortgage interest and PMI will be astronomical. Many people are able to get a first time home buyer loan called an FHA.
This site will help:

home buying guide

If you are interested in buying in any of the five boroughs and limited areas in Nassau County (not the most desirable areas), there's a non profit organization called NACA (Neighborhood Assistance Corporation of America). Their goal is to stabilize neighborhoods and maximize homeownership opportunities for working people and families. They work with various lenders like Bank of America, Citibank and other local banks to stop predatory lending. Its a great program for those who don't have large amounts of savings and who are just starting out.

The mortgages offered through the banks have require no downpayment, closing costs, PMI, and are 1% below the interest rate offered by the bank. The maximum purchase price for NY are
Single family: 325000 Two family: 371621
Three family: 449181 Four family: 558236

You can't own any other property and you must live in the house as long as the mortgage is through NACA. There are no income limits if you stay in the prority area (in NY, its the 5 boroughs, Yonkers, and limited town in Nassau county). If you want to purchase in areas outside of priority area then they do have income limits.

My MOH's FIL is a real estate agent in Memphis who sometimes gets business through them. So I can vouch for the credibility of the program. DH and I went to the workshop and are seriously considering going through them here in Chicago.

There are programs out there who offer various programs to help homeownership, you just have to do your research.

NACA website

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Posted by MrsTC

The mortgage interest and PMI will be astronomical. Many people are able to get a first time home buyer loan called an FHA.
This site will help:

home buying guide

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MrsTC that is a great site!!! I just printed out all of those brochures!

Thanks for all your help. I do have question though..what is PMI??

Mrs.TC I went and downloaded everything from that website too thanks!!

you are welcome ladies

A no money down loan is a simple concept.

You just pay 'negative points' on the loan so it covers your closing costs. The drawback to this is... you pay a higher interest rate... and you pay PMI.

I would prefer to actually put my 20% down (in equity)... to avoid PMI... then do negative points so it covers my closing costs.