Buying Homes With No Money Down

Buying a Home with No Money Down

Everyone has a dream to have a home of their own one day, no matter the age. Nonetheless, due to the current economic situations, it may seem impossible to achieve this dream. Buying a house with instalments or mortgage always comes up with an issue of having to raise a down payment. Luckily, it is possible, and there are various ways of buying a house with no money down thus read on to find out how possible it is.

Today, rent-to-own is a popular trend nowadays as a method of buying a house without any money down. It may be quite tricky and you ought to read the lease-purchase contract precisely to understand what you will be getting yourself into. Also, ensure you go through the clauses under all terms and conditions. Normally, a minimal fee of about 5% or less is often required to help secure the lease-purchase agreement. The right to exercise the option to buy is usually about three years and not exercising the option nullifies the lease-purchase contract which may make you lose your money all the same. You can inquire whether it is possible to keep the price of the property as it is until when you decide to exercise the purchase option, and this could help you save a lot of money.

Moreover, the seller’s selling price is usually way below the current market value or the appraised market value. Financing or mortgage companies give loans 100% of the market or assessed value. If the seller’s price is at 80% of the 100% loan amount, then you will have 20% available as equity. The seller ought to agree that the loan amount is the selling price and should also acknowledge the receipt of the buyer’s equity. In this way, there would be no money down coming from you, and it would seem like you have bargained your way out of the down payment. You can also try and find out the possibility of making the 20% as a discount from the seller to help you do away with the down payment as it would appear more transparent to the mortgage company.

In-house or owner financing is yet another way to consider at while buying a house with no money down. In-house financing ibis typically did by the owner-developer –marketer of real estate and this, therefore, means that they do own the land, have developed it and market it on their own. Most of the owner/marketer/developer outfits are usually flexible when it gets to sales especially when you have no money down. Some incorporate the down payment in the very first few months of mortgage payment depending on the buyer’s capacity. After the down payment is satisfied, the monthly mortgage payments return to normal. This method helps relieve one from the stress of having to come up with outright cash for the down payment.

There are more ways of buying a house with no money down although as a buyer you should go for those that are best fit for them. Always avoid those that are beyond your abilities or capacity.



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