If you wish to buy a new home but haven’t sold your current home, a zero-down mortgage might be the perfect solution for you. This financing option also allows you to pay for a home without waiting years to save cash for a down payment. At Community West Credit Union, we have 50 years of experience creating client-centered financial solutions for members throughout West Michigan. Here, we outline why you should consider home loans with no down payment.
Cases for Getting a Zero-Down Mortgage
In most scenarios, lenders determine a down payment by taking a percentage of the borrowed amount on your loan. Down payments can range anywhere from 5% to 30% depending on the mortgage type and the amount a person borrows. This cost is unrealistic for many people, making a zero-down loan option integral to helping them finance a home in a timely matter. Some situations where zero-down mortgages may be beneficial include:
When your Current Home Hasn’t Sold
In a fast-moving market, there may not be time to wait for your home to sell. If you’re waiting on your current home to sell, but you’ve found the home of your dreams, a zero-down mortgage is the perfect option. A zero-down mortgage allows you to purchase a new home before you have the funds from the sale of your current home. When your first home sells, you can make a one-time payment toward your zero-down loan or use those funds to put money into your new home through renovations or upgrades.
Lack of Adequate Savings
There are plenty of homebuyers with steady jobs and regular incomes who are fully capable of making monthly mortgage payments. They simply don’t have enough funds in their savings accounts to make a down payment. Home loans with no down payment enable homebuyers to secure mortgages even if they don’t have the necessary savings for an upfront expense.
When Beginning a Career
Recent college graduates and other young professionals often wish to buy homes as they begin their adult lives. However, starting salaries, hefty student loans, and other expenses can make leaving a down payment seem impossible. Zero-down mortgages are a perfect solution for young adults just starting their careers with a steady flow of income but not enough savings yet. Young professionals should also consider a zero-down mortgage because purchasing a home can be more affordable than paying rent. According to a study by Axios, owning is cheaper than renting in much of the U.S, especially in rural and suburban areas where property costs less.
When Buying a Fixer-Upper Home
Homebuyers who can do their own restoration should consider home loans with no down payment when purchasing a property that needs work. By not making a down payment, these individuals can save money for the materials they need to repair and remodel the house. Obtaining a zero-down mortgage for these types of properties may also enhance profits should the homeowner decide to sell down the road.
Benefits of Zero-Down Mortgages
In addition to cost savings, there are multiple advantages that come with choosing zero-down mortgages. At Community West Credit Union, we deliver the following benefits to individuals in West Michigan seeking home loans with zero down payment:
- First-time home buyer options
- Option to buy before your current home sells
- Local decision-making
- Competitive rates
- Fixed-rate loans with multiple terms available
- Gift funds allowed to cover closing costs
- Personalized service
Secure Your Zero-Down Mortgage with Community West Credit Union
As a trusted and experienced credit union in West Michigan, Community West Credit Union provides the tools you need to achieve your financial dreams. As a not-for-profit organization governed by a member-appointed board of directors, we offer more personalized service with better rates than big banks.
If you think you are a good fit for a zero-down mortgage, you can apply online or contact us today for more information about our mortgage and loan services, or visit one of our branches in Comstock Park, Grandville, Hudsonville, Kentwood, Middleville, or Rockford, to discover the Community West Credit Union difference.