Subprime lenders now offer financing packages with no down payment. Interest rates are higher on these types of loans, but they make buying a home easier. And unlike a conventional loan, private mortgage insurance is not required. There are two types of no down payment mortgage packages, each with their own requirements.

Types of loans without a down payment

100% Financing, as the name implies, offers full financing of your property. The other option, 80/20, finances your mortgage with two loans. Your lender can carry both loans, but sometimes the seller or a second lender is required to carry 20% of the mortgage.

100% financing is easier to handle, but not all lenders will offer this type of home loan. 80/20 financing is more common, but requires negotiation if the seller is involved.

Zero-Down Ratings

Each lender has their own criteria for determining who will qualify for a no down payment loan. Most subprime lenders require bankruptcies or foreclosures to be at least twelve months old. A conventional loan requires that these be discharged two or four years ago.

While a credit score of 600 or higher is best, large cash reserves can also qualify you. Six to twelve months’ worth of cash reserves in the form of savings, money market or other liquid assets is considered ideal.

If you choose 80/20 financing with the seller holding the second mortgage, you may qualify with subprime lenders with a score of 560.

Zero-down subprime lenders

You can find subprime mortgages with no down payment from conventional and niche subprime lenders. Be sure to request quotes from as many mortgage lenders as possible to ensure you find the lowest rate and best terms.

You’ll also want to decide what type of mortgage you want. An ARM is easier to qualify for and has lower rates. A fixed-rate mortgage offers the security of a constant interest rate for the life of your loan.

Generally, an ARM will be a better deal if you plan to refinance in a couple of years. After you’ve improved your credit history, you can refinance a conventional mortgage with low interest rates.

To view our list of recommended subprime mortgage lenders online, visit this

page: Recommended Bad Credit Mortgage Lenders Online.