No Down Payment Mortgage: Is It Right for You?
There are options for mortgages with no down payment, but it's important to decide if that choice will be the right one for you. There are many ways to get a mortgage, and some options don’t even require a down payment. While most mortgage lenders still require at least some down payment, it’s important to explore all your choices and decide which one is right for you. With a no down payment mortgage, you have the opportunity to buy a house even if you don’t have a lot of available cash. Some people also choose this option if the house needs work, because they want to use their cash reserves to fix up the house and make changes to it. To determine if a no down payment mortgage is right for you, there are some issues to consider.
Mortgage Pre-qualification and Pre-approval
PRE-QUALIFICATION - This is an easy first step to show sellers you’re getting serious about buying. In order to get a mortgage pre-qualification letter, a loan officer will make a general assessment of your financial situation. They’ll be able to gauge whether or not you can get a loan and how much money you can get. PRE-APPROVAL - Once you’ve gotten a better idea of your financial picture, you need to get pre-approved. It’s important to time your pre-approval with when you’re ready to buy because a pre-approval letter expires in 60 to 90 days. Pre-approval is a conditional promise from a bank or lender that they are willing to lend to you, and for what amount.