How to Get a Zero Down Mortgage in Utah

April 16, 2021
Integrity First Lending

It can be hard to save up $50,000 or more for a down payment on a home. You may wonder if you qualify for a zero down mortgage in Utah. Talk to the mortgage lenders at Integrity First Lending of Salt Lake City. We can help you find out if you qualify for this helpful program.

zero down mortgage in Utah

Qualifications for a Zero Down Mortgage in Utah

To qualify for a zero down mortgage, applicants need a good credit score. For this type of mortgage, that’s usually around 620-700. If your credit score is below that, you can take some time to bring it back up and then apply for a mortgage.

Other factors your lender will look at are your credit history, debt-to-income ratio, employment history and salary, and possibly other considerations as well.

Pros of a Zero Down Mortgage

The most attractive part of a zero down mortgage for most home buyers in Utah is that they don’t have to wait to save up a down payment in order to become a homeowner. This means you don’t have to spend years paying rent without anything to show for it.

Owning your own home is a great investment. When you make your mortgage payment, you’re paying toward something you own, versus a rent payment, in which you’re paying for something someone else owns.

Cons of a Zero Down Mortgage

When you have no money to put down for a mortgage, you must borrow more money to pay for your house. That means you owe more, and your payments will be larger.

Home buyers who don’t put at least 20% down on their homes must pay private mortgage insurance every month until they build up 20% equity. This is usually another $100-$200 on top of your mortgage payment.

When you have no equity in your home, it’s possible you could end up in an “upside-down mortgage” situation. What this means is that if you put zero down on a $300,000 home and two years later you wanted to sell it but it was only valued at $275,000, you would owe more on your home than it was worth.

This rarely happens because lenders take great pains to make sure they lend money safely, and would not approve a loan for an overpriced home. Further, if you can hang on to an upside-down mortgage and avoid selling and moving for a couple of years, your value would likely come back up during this time.

Best Mortgage Lenders in Utah

The pros of a zero-down mortgage often outweigh the cons, since buying a home is usually a better financial decision than renting. If you’re not sure, come talk to the mortgage lenders at Integrity First Lending. We’ll look over your financial information and run some numbers to see whether we think you would qualify for a zero-down loan. Don’t wait!

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