New York Home Loan Tips: Financing Home Mortgage with No Money Down By Maria Ny

The biggest challenge for most first-time home buyers is having the available cash reserves for a down payment-especially in markets like New York City, where home prices have soared over the last few years.

If you don't have enough money for a 20% down payment, you'll need a second mortgage with your purchase or you will have to pay mortgage insurance, also known as private mortgage insurance (PMI). This usually adds a 0.5% to 0.75% premium on top of your interest rate, says Jeff Lubar, a spokesman for the Mortgage Insurance Companies of America. Although prices have dipped, the median prices for homes in New York are still in the $400,000s, making PMI very expensive.

But, thanks to the no money down home loan, New York home buying and financing a second home in New York is more feasible. And, you don't have to pay PMI. Piggyback loan and 80-20 mortgage loan are common terms for the no money down, 100% 1st mortgage loan because it typically entails an 80% 1st mortgage and a piggyback 2nd to cover the 20% balance.

80-20 mortgage loans, like other mortgage loans, come in a variety of flavors to meet almost any budget. You can get a fixed interest rate loan, adjustable rate loan, interest only and even a jumbo home loan (non-conforming loan exceeding the 2006 Fannie Mae and Freddie Mac lending limits of $417,000) for people interested in higher-priced homes.

Before applying for your loan, be sure to get your credit reports from the three credit bureaus: Experian, Equifax and TransUnion, and review them for errors. Experts estimate that around 70% of consumer credit reports have at least one error. That one error could make a big difference in the interest rates you pay on your loans. If you find any errors on your credit reports, dispute them with the credit bureaus. You may also have to contact the creditors directly because errors sometimes originate with the creditor. For example, Capital One reported that I had a charged off account. They had confused me with another person with a similar Social Security number. They corrected the problem by deleting this off my reports.

Also, get your FICO scores at myfico.com/12. Not only will you get your scores, but also any negative factor contributing to your scores lowering. You can also use this information as a way of comparing lender rates without having your credit run-just fax your scores to the lender. Don't let anyone run your credit reports until you've narrowed your choice to 2 - 3 lenders because too many inquiries also lower your scores.

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