October 2017   Volume 43, Number 10      


What Real Estate Agents Need to Know About Zero-down Loans

Several commercial lenders are offering mortgages that allow one percent down or nothing at all. In hot markets where the cost of a down payment has been on the rise, super low down loans have become one of the few ways a young family can afford to buy a home before they get locked out by rising interest rates or higher home prices.

Many lenders offering zero-down loans are doing so in partnership with Fannie Mae or Freddie Mac, whose low down payment programs (HomeReady and HomeSteps) require a 97 percent loan-to-value ratio or three percent down. Lenders make up for the difference by charging higher interest rates.

Today’s zero-down loans are also considered to be safer than the nothing down loans marketed during the housing boom. Nearly all the super low down payment loans are 30-year fixed rate, not the adjustable-rate mortgage (ARM) loans that got so many borrowers in trouble a decade ago. Zero-down loans also require stricter underwriting standards, which protect both lenders and buyers.

They also usually cost more. Zero-down payment loans typically carry higher interest rates. Rates for zero-down loans are typically around 4.6 percent or 4.7 percent. The current average rate on a 30-year fixed rate mortgage is currently just under four percent.

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In this issue:

Commercial Real Estate Becoming More Vulnerable to Cyberattack

8 States With the Largest Housing Bubbles

20 ZIP Codes with the Highest Real Estate Returns

Banks Tightening Lending Standards for Commercial Real Estate in Q2

Facebook Launches Dynamic Ads for Real Estate

Nextdoor App Rolls Out Real Estate Listings

Robot Real Estate Agents to Sell Homes

U.S. Home Sales to Foreigners Surge by 49 Percent

What Real Estate Agents Need to Know About Zero-down Loans

Four Costs Homebuyers Often Forget to Factor Into Their Budgets


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