No Money Down Loans
You want to buy a home but you do not have
money for a down payment or for closing costs? Well, just forget it. At
least that is what you have probably been told by people who think they
know what they are talking about, but simply do not.
There are many loan packages available
for people with no money to put down on the home or for closing
costs. The home loan industry has undergone revolutionary changes over
the last ten to twenty years. No longer is it true that you need to put
down 10% and have enough money for closing costs in order to buy a home.
The simple fact of the matter is that there are home loan packages that
can get you in a home with no money down, or very little.
Let us first examine the down payment.
A down payment is the amount of money towards the purchase price that you
pay out of your own pocket. Typically people put between 5% and 10% down
on a home when they sign a contract. This is not a legal requirement, but
rather an established tradition. If you find a buyer who does not require
a down payment on contract and you are approved for a loan with 100% financing,
then you need not pay anything out of pocket.
But, just how do you do this? The first
thing you need to do is meet with a mortgage professional and get that
aspect of the process completed. You will want to have a pre-approval or
even a mortgage commitment with contingencies based on home value and selling
price. Armed with this, you will be in a better negotiating position to
get a seller to agree to sell their home with no money down. Your lender
also may be able to refer you to real estate agents that can help you find
a home that you can purchase with no money down. Again, there are no legal
obligations to put money down, it is rather just custom and tradition.
With the right mortgage lender and real estate agent you will be able to
purchase a home without any money out of pocket.
Aside from the down payment you have likely
been told that you will not be able to purchase a home without money for
closing costs. Closing costs can be anywhere from a couple of thousand
dollars to tens of thousands of dollars depending on the value of the home,
the size of the mortgage and other variables. You do not necessarily have
to pay closing costs out of your pocket.
There are loan packages available for people
that are not able to pay closing costs out of their own pocket. What these
packages basically do is inflate the purchase price of the house by the
amount of the closing costs and then have the seller pay the closing costs
for the buyer with those extra funds. So, for example, if the purchase
price of the house is $100,000 and closing costs were calculated to be
$4,500 the contract would read that the sale price is $104,500 and would
include language that the seller is to pay $4,500 worth of closing costs
for the buyer. The seller still gets the $100,000 for the home and the
additional amount that was financed goes towards the purchasers closing
costs.
Different states have different rules on
how the language must read and what closing costs can and cannot be paid
by the seller. You will want to make sure you have a full understanding
of this process and how this will work under you specific circumstances.
Believe it or not, there are loan packages
available that combine both of these examples - no money down and no money
for closing costs. The property will need to appraise at a specified amount
in order to qualify but the key is understanding that this very much can
be done. It can turn a renter into a homeowner with nothing out of pocket
and perhaps even a reduced monthly payment. Mortgage payments can be at
or below rent payments depending on the home you pick.
Today's home loan industry is competitive.
There are packages available for most people no matter what credit history
they have or what funds they have available for the down payment and/or
closing costs. Rather than deny your own mortgage application, speak to
a mortgage professional to determine if you can begin realizing your dream
of homeownership and a brighter financial future.
Resources:
Payday
Loans
Business
Loans
Author-Bio: Max Hunter is the author of
many credit related articles. If you are looking for help with Home Loans
or any type of credit issue please visit us at http://www.homeloanave.com |
