Pros and Cons of 0% DP Home Installment Payment Plans

The mortgage with no down payment offer is undoubtedly a seductive offer, especially for those dreaming of owning a house!

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Minute Read

2 mins

Published

22.08.2022

We often encounter a home loan advertising offers mortgages without a down payment. This convenience will tempt us to immediately buy a house without saving up a certain amount. However, is this payment scheme really profitable for us? Let’s weigh the advantages and disadvantages of home mortgages without a down payment in the following article!

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Advantages

  • The opportunity to have your dream house

Down payment is the biggest obstacle for many people who wants to buy their dream house, especially for low-income workers and first jobbers. The installment program with a small or zero down payment has finally become a solution because there is no need to save up to a certain amount. In addition, we can also focus on paying installments and mortgage interest in the following month.

  • Available for all types of properties

Not only landed houses, but the installment scheme without a down payment also applies to other types of properties such as shophouses, flats, and home offices. However, the house program without a down payment is only valid for purchasing your first property. Meanwhile, for the second property loan, with no more than 21 square meters, an upfront financing scheme will be applied because it is considered as a form of investment.

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Disadvantages

  • Tenor gets longer with a larger debt burden

Though it is true, that the zero down payment house mortgage program makes it easier for us to own a house without waiting for sufficient savings, this loan scheme actually makes the installments longer with a heavy payment range. Before deciding to take a home loan without a down payment, we must prepare ourselves not to experience financial difficulties in the future.

  • Mortgage interest rates may increase every year

Home installment loan programs usually apply a fixed rate for the first year. After passing one year, we will be charged a floating rate that applies to the following tenor years. With installment interest getting weightier, we need to anticipate it with careful financial planning to afford the installments comfortably.

 

After knowing the benefits and the drawbacks of a home loan without a down payment, if you are still considering on buying a house with zero down payment home loan, immediately do a long-term financial calculation carefully. That way, we won’t be stuck in financial problems in the future!