Agreed, but 22% difference is a lot. Also, my only issue about the article is about the source of money for ZeroDown; it does not mention anything about this 22% difference and the PMI difference that the company can pocket if comparing to people putting 20% down
From the article: ZeroDown earns money from its $10,000 price tag and through a 24/7 concierge service it provides to customers. It’s partnered with Sheltr to connect ZeroDown users to services they might need as homeowners, including a babysitter or a plumber, for example
Doesn't sound like a great deal for the end customer. Here's a breakdown for an example home of $1M
With zerodown:
Maximum Home value: $1M | Maximum Monthly payment: $6,700 (includes Home Owners Insurance and property taxes) | One time payment: $10,000| Total payment over 5 yrs: (6700 x 12 x 5) + 10000 which is $412,000
Net equity after 5 yrs: 90000 - 10000 (initial one time payment) = $80,000
Assuming same down payment of 10,000 (assuming the banks allow it?)
Home value: $1M | Monthly payment: $6,119 (includes PMI and Home Owners Insurance and property taxes) | Down payment: $10,000 | Total payment over 5yrs: (6119 x 12 x 5) + 10000 + 29,063.56 (approximate closing costs) which is $406,203.56
Net equity after 5yrs: $92,774 + 10,000 (towards downpayment) = $102,774
Zerodown would mean you own 22.15% less equity than traditional mortgage assuming the home sells at the same purchase price