These days, it can be really hard to find a mortgage where you do not have to make a down payment. These are also known as no money down mortgages in the United States of America (USA). There is a good reason for such a statement. In the last few years banks and credit unions have really toughened their rules and regulations and much of this can be attributed to the catastrophic financial crisis that took place in 2009 and affected this North American country and the rest of the world to such an extent. However, it is still not downright impossible to find no money down bad credit mortgage.
They have started to ask for bigger down payments and much of this happens because home prices are not increasing the way that they used to do before. In fact, these prices are only dropping and that too at a steady rate. This means that lenders are always at greater risk and this is especially true of loans where a low amount of down payment is needed. This is the reason why no money down mortgage with bad credit has become so popular. In case homeowners do not have any equity in their home there is always a chance that they might just walk away from it.
This is especially true when they fall behind on their payments. This would mean that there would be foreclosures as well and they would be quite costly as well, for the lenders at least. On the other hand if the borrower is able to make a down payment of at least 10 per cent then at least the lender would have a buffer, something to fall back on. These days, you have to look a little hard for mortgage loan with no money down. In such situations, the lenders also assume that the borrower would keep on making the payments on a regular basis.
The main reason for such a statement is the fact that the borrowers would not want to miss out on the initial money that they invested – the down payment. For more information on how to refinance mortgage with no money down please visit Mortgagerefinancebadcredit.com