zero down mortgage

Zero Down Investor Mortgage Loans

2009-07-05T10:01:00.000-07:00

You won’t have to look too hard to find information about zero-down investing, especially online and on late-night television. No-money-down is the siren call that many online gurus use to lure investors into paying for their courses and mentor services. These sources will often emphasize the upside of zero-down financing, but they rarely mention the risks.

2009-07-05T10:00:00.002-07:00

Zero down financing can be accomplished either through a single 100% mortgage, or by a combination of two mortgages (sometimes referred to as a piggyback mortgage). The investor gets the significant benefit of not having to bring a down-payment to closing. This might allow an investor to take advantage of a buying opportunity without selling another property, stocks, or other investments. The investor also maximizes the amount of interest that can be deducted for tax purposes.

2009-07-05T10:00:00.001-07:00

On the downside, many lenders do not offer 100% financing for properties that are not owner occupied. Those that do may charge higher rates which partially offset the benefit of not having to pay a down payment. It is also important to take into consideration the fact that assuming a higher level of debt will increase your monthly payment, making it more difficult for your property to generate a positive cashflow on an ongoing basis. This is a particularly important consideration. There is no free lunch; pay now or pay later.

zero down mortgage

2009-07-05T09:38:00.000-07:00

Zero-down is a good option for many investors – but just because you can buy a property for zero-down doesn’t mean that you should, regardless of what the gurus tell you.

xbghtiyrs3