100%?

People are always wondering if putting no money into a purchase transaction is a good or bad idea.  I don’t think there is a standard correct answer.

A few days ago I received a call from someone who was talking to a “preferred” lender at a new construction open house. This person told me that the payment, that the loan officer provided, was too high, and that he (the buyer) now was not sure about doing a 100% (no down payment) loan.

After I asked questions about what he wanted regarding his financial goals, took a look at his credit and analyzed his loan program qualifications, I explained that his payment would not be nearly as high as the loan officer suggested. Now the buyer is ok with 100% financing.

Yes, there are several factors to consider regarding 100% financing (especially if the loan officer doesn’t get the right program). If the payment is too high, nothing else really matters. So, isn’t that true, then, about any loan or down payment amount?

 

6 March 2007 | Down Payment, First Time Homebuyers, Loan Officers | Comments

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