We all know home prices are getting more expensive every day, and as a result, you may be looking for 100% mortgage financing when it comes time to purchase a home.
Perhaps not out of preference but more out of necessity, which is a scary thought but let’s not get into that. Let’s just help you find these elusive mortgages.
Check Your Credit Union’s Mortgage Programs
One perhaps overlooked place to look for a mortgage is a local credit union. Somewhat surprisingly, many of these not-for-profit organizations offer great interest rates and a wide variety of home loan programs.
In fact, a lot of them actually offers 100% financing on home purchases, which beats the 3.5% down required by the FHA and the 3% down required by newer conventional loans like the yourFirst Mortgage and the Affordable Loan Solution.
If 97% LTV doesn’t quite do it for you, do a search in your area (or nationwide) for a credit union willing to provide a mortgage with no down payment.
A simple google search should yield plenty of results for credit unions willing to let you buy a home with nothing down.
For example, I searched California credit unions and found Travis Credit Union, which offers 100% financing to first-time home buyers (no ownership in the past 3 years).
The loan is a 95% LTV first mortgage and a 5% fixed second mortgage on purchase prices as high as $500,000. It requires just a 720 minimum FICO score and two months PITI, and is only good on owner-occupied properties.
Mortgage insurance is required, along with an impound account to ensure you’re able to pay your homeowners insurance and property taxes.
Up in the Bay Area, home buyers can take advantage of the POPPYLOAN from the San Francisco Federal Credit Union, which offers 100% financing on properties as expensive as $2 million.
In Utah, prospective home buyers can take advantage of the “First-Time Home Buyer Loan” from Mountain America Credit Union, which offers 100% financing and no private mortgage insurance. Loan amounts as high as $300,000 and both fixed and adjustable-rate options are available.
Verity Credit Union in Seattle also has 100% purchase financing options that could be a lifesaver for those struggling to afford the sky-high prices up there. They keep the loans on their own books so they’re able to get more aggressive than Fannie and Freddie, or your national bank.
Another Washington-based credit union, Columbia Credit Union, offers the good old-fashioned 80/20 mortgage in their “80+20 Home Loan,” which is a first mortgage at 80% LTV and a second for the remaining 20%. This allows buyers to really avoid PMI.
One other credit union in the Pacific Northwest, Gesa Credit Union, offers the “Zero Down Home Loan,” which is 100% financing for both first-timers and move-up buyers. The twist here is that it’s a 15/15 mortgage, those which adjust just once at the loan’s halfway point.
The List Goes On…
The State Employees’ Credit Union (SECU) out of North Carolina also offers 100% financing for the purchase of a single-family residence.
Then there’s nearby Coastal 24 Federal Credit Union, which offers a 100% home equity loan with rates as low as 4%.
A loan program at Virginia-based credit union Northwest FCU called the “100% Homebuyer’s Edge” also offers 100% financing with no down payment necessary.
Again, there are credit qualifications and the property has to be owner-occupied, but you can also fully finance condos and townhomes.
If you happen to live in Tennessee, you can take advantage of the “First Time Home Buyer’s Program” from Eastman Credit Union, which like the others offers 100% financing and you can finance the “majority of closing costs.”
On the national level, Navy Federal Credit Union offers its “HomeBuyers Choice Mortgage,” which offers 100% financing when you pay a funding fee of 1.75%. This fee can be built into the mortgage rate by taking a rate .375% higher than what is originally offered.
In order to join, you have to some affiliation with the armed forces, whether directly or via a family member.
The good news is that you don’t have to be an astronaut to join, unlike the NASA Federal Credit Union and its zero down option.
If you are though, you can get a mortgage with 100% financing on a purchase up to $650,000 on primary residences in the states of Maryland, Pennsylvania, Virginia, and Washington DC.
And the loan does not require mortgage insurance, though as I recently wrote, all loans above 80% have some sort of MI built into the interest rate.
These are just a handful of examples…do your own search and you’ll likely find a similar option nearby.
More Benefits of Getting a Mortgage from a Credit Union
Aside from the very liberal mortgage financing options available from credit unions, there are other benefits as well.
For one, most of these credit unions will hold onto your mortgage for the life of the loan so you won’t have to deal with multiple loan servicers passing your loan on and on.
It’s pretty annoying having to provide paperwork to new companies, register at multiple servicer’s websites, and constantly change automated payment methods. You could also miss a payment as a result.
Speaking of payments, many credit unions also offer free biweekly mortgage payment programs so you don’t have to do it yourself or pay an outside company.
Many of these credit unions also offer pricing specials and keep closing costs to a minimum. Additionally, you can always go visit them at a local branch if you have any questions or concerns.
But as always, be sure to shop around online, and with local banks and mortgage brokers to ensure you find the best deal.