Just a couple decades ago, people regularly made down payments in the range of 20 percent of the value of the home they were buying. Today that average percentage had dropped to under 4 percent. One primary reason for this was simply the skyrocketing value of real estate. To address this, bankers and lenders conceived a number of aggressive and clever ways to help first time home buyers finance their dream home.
Much like with 0 down home loans, a no money down home mortgage means financing the whole value of the home instead of paying a down payment. Did you know that the no money down concept was originally conceived to help wealthy investors further invest without liquidating their assets?
A no money down home mortgage has always been a poor choice for first time homebuyers who don’t have enough money for a down payment. Besides the obvious reason, it adds a lot to the actual cost of the home in a few different ways. One of these ways is with additional monthly PMI payments.