Some borrowers can qualify for a 100% LTV Mortgage Loan.
Here’s how it works.
The 2015 housing market is building on last year’s positive momentum. Demand for homes continues to outpace supply. This is leading home values higher; and multiple-offer situations continue to be common nationwide.
Thankfully, mortgage guidelines are loosening and some borrowers can qualify for a 100% LTV mortgage loan.
Today’s home buyers have an easier time getting approved for a mortgage as compared to several years ago. Banks are reducing approval standards, lowering minimum credit score requirements, and have made it simpler to get access to low-down payment mortgages and no-money-down loans.
Compared to last year, improving market conditions have prompted many banks to lower their minimum credit score thresholds. Combined with a reduction in FHA MIP rates, this has put FHA loans within reach of more buyers, and Fannie Mae and Freddie Mac continue to support their five percent down payment mortgage programs.
VA loans and USDA loans remain popular, too. Neither of those requires a down payment.
VA loans, available to eligible active-duty military personnel, veterans of the armed services, members of the national guard and reserves, and surviving spouses, offer 100% financing and require no mortgage insurance. Approval standards are flexible and mortgage rates are often lower than with comparable conventional loans.
USDA loans also require no money down.
USDA loans are backed by the U.S. Department of Agriculture and can be used in many rural and suburban areas nationwide. USDA mortgage rates are typically the lowest of all government-backed loans, and mortgage insurance rates are minuscule compared to other low-downpayment programs.
With home prices expected to rise through 2015 and into 2016, the availability of low- and no-down payment mortgages could be a boon to U.S. buyers — especially if mortgage rates remain low.
Mortgage rates have been on a downward trajectory since the start of last year. Lenders now quote rates in the 3s, and APR is similarly low for loans of all types, including FHA, conventional, VA, and USDA.
Compare today’s mortgage rates now. Rates are available online at no cost and with no obligation. No social security number is required to get started.
Source: Dan Green, The Mortgage Reports.com, April 17, 2015.