How to Qualify for a No Money Down Home Loan
Qualifying for a no money down home loan requires that you have a strong credit rating and the ability to document your income. No money down home loans also charge a higher interest rate than mortgages with a higher down payment. You may have to apply for many no money down mortgages before you are successfully approved for one at an affordable rate.
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Instructions
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Improve your credit rating to the fullest extent possible. Make all bill and loan payments on time. Request a copy of your credit report from the three major credit bureaus (Equifax, Experian, TransUnion). Dispute any errors that may appear on your credit report quickly to avoid interference with your loan applications.
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Document your income as extensively as you can. Collect bank records and pay stubs going back at least six months. Document all significant assets that you possess. Create a budget showing your monthly expenses. Prepare these documents to show to lenders when you apply for loans. The more extensively you can document your income and demonstrate your ability to pay your mortgage, the greater your chances of being approved for a no money down mortgage.
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Apply for multiple no money down mortgages from a variety of banks and other lenders. Applying for mortgages will temporarily damage your credit rating, but the benefit of receiving a broader array of offers can make up for it.
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Examine all mortgage agreements carefully for various fees. A low interest rate on a mortgage can be offset by significant fees hiding in the fine print of the contract. The fact that there is no down payment doesn't mean that there aren't other fees such as loan origination costs attached to the mortgage. You will likely be obligated to pay for private mortgage insurance (PMI) to qualify for a no money down mortgage.
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Sign the mortgage agreement when you are satisfied that you have found a deal that fits your financial requirements.
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