For those looking to buy a home, the most commonly preferred mortgage loans are usually provided up to a certain percentage of the property’s value. In other words, banks typically finance a portion such as 80%, 75% or 50% of the purchase price. The remaining amount is paid as a down payment by the buyer. However, with banks that offer zero-down mortgages, buyers without savings can also become homeowners.
Can You Buy a Home Without a Down Payment?
People without a down payment can sometimes obtain a mortgage if they meet specific bank requirements. All conditions set by the lender must be met to qualify. In most cases, when a mortgage application is submitted, the maximum loan-to-value ratio offered by banks is around 80%. For example, for a property priced at 100,000, the bank may provide up to 80,000, while the remaining 20,000 is expected from the buyer as a down payment.
This requirement can be a hurdle for buyers who do not have cash. Several approaches are sometimes used to address this. One common tactic is negotiating with the seller to influence the appraised value. For instance, if the sale price is 100,000, the seller and buyer might present the property as 120,000 so that an appraiser values it at 100,000 and the bank covers the full amount. However, this may not always work because professional appraisers are familiar with local market values and may report the true value if they consider the requested amount inflated.
Banks That Offer Zero-Down Mortgages
Banks that provide zero-down home loans can finance the full appraised value of a property, enabling buyers to purchase without an upfront payment. Before applying, it can be useful to consider projects developed by public or institutional housing agencies, as they sometimes include special financing options.
State-backed or institutional housing initiatives often offer attractive terms and lower interest rates, and buyers may participate in such projects to acquire a home. These programs typically operate differently from standard mortgage lending and are designed to facilitate home ownership through project participation rather than conventional loan structures.
Because such project-based opportunities are limited, you may also evaluate zero-down mortgage packages from the following banks:
- QNB Finansbank Zero-Down Loan: This bank offers options for buyers without a down payment and provides repayment terms extending up to 180 months, easing the payment burden. Applicants submit required documents and the bank reviews the application and creditworthiness. If approved, the bank assigns an appraiser within a couple of business days to determine the property value and, following final approval, proceeds with the purchase process.
- HSBC: With additional collateral, HSBC may offer zero-down home loans with terms up to 120 months. In such cases, you can borrow up to the amount determined by the appraiser.
- TEB: TEB provides zero-down mortgage options with repayment periods of up to 10 years, allowing borrowers to finance the property’s appraised value.
Key Points When Taking a Zero-Down Mortgage
The most important factor for buyers seeking a zero-down mortgage is the appraised value determined by the bank’s expert. If the appraiser values the property lower than the seller’s price and the seller does not reduce the asking price, the buyer will need to cover the difference, effectively acting as a down payment. Another critical consideration is the interest rate structure—whether rates are fixed or variable—and the exact rate you will pay over the loan term.