A little less than six months ago you could finance a home with no money down with few problems. Even if you had marginal credit, no assets, and a relatively soft employment history.
These days you’ll spend a lot of time shopping for 100% financing even if your the most well-qualified borrower out there. You may even fail to find one bank or lender willing to offer you financing without a down payment.
The reason is because many of the banks and lenders offering 100% financing were losing money when homeowner after homeowner failed to make the first payment, leaving the bank with the keys and a vacant property.
This scenario seemed to be so persistent that many banks and lenders offering 100% financing closed down shop, or simply withdrew the program to avoid shutting their doors.
It seems many homeowners were willing to buy properties with zero down in the hopes of turning a quick profit, but as home prices slid, borrowers simply walked away with no more than a credit ding.
The good news is that 100% financing will come back, this time with higher rates and insurance that protects banks and lenders in the case of a default or foreclosure. While it may not be as good as its’ predecessor, it should stick around a bit longer with the added safety to banks and lenders offering it.
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