This program will allow First-time homebuyers to enter Homeownership with 0% down, no closing cost, and no mortgage insurance. Buyers can own their home and still enjoy no mortgage (the same benefits that folks who put 20% down on a home enjoy) makes this an intriguing program. Mortgage insurance comes out to about (1.25-1.75%) of the loan's balance and is commonly paid as part of the homeowner's monthly mortgage.
Is Bank of America 0% down a good deal for future Homeowners?
This is a great question; like all great questions, there are many ways to look at it. Here's what we know, the cheapest way to get into a home requires 3% down (not accounting for CalHFA loans which give borrowers loans and grants for their down payments/closing cost). So on the average home in California, a modest home can be sold for around $450,000, equating to $13,500. The great news about putting money down as a down payment is that this immediately allows the buyer to have equity in the home, making it an asset. Once the buyer has the down payment, they also should account for a closing cost of around 2.5% of the total home price. In the example of a home for sale at $450,000, the closing cost would be $11,250. In the example above, the first-time homeowner would have to pay $24,750 plus other fees to acquire their first home.