How to Buy a House Without a Down Payment

Buying a home is exciting, but the home buying process is expensive. You often have to pay a variety of upfront fees such as an earnest money deposit, appraisal fee, home inspection fee and closing costs. Additionally, some lenders require a down payment. However, there are ways to cut costs and purchase a home with no money down.

Things You'll Need

• Credit report
• Lender

Instructions

1. Check your FICO score. To purchase a home with no money down, the majority of lenders require a minimum credit score between 680 and 700. Before applying for a loan, check your credit score and see whether you qualify for this type of financing.

2. Pay down your debts. Individuals with a high debt-to-income ratio may not qualify for a no money down home loan. Resolve to pay down your credit card balances and other debts. This increases your disposable income and raises your credit score.

3. Practice good credit habits. Paying your bills late or skipping payments lowers your credit score. Make every effort to pay your bills on time--on or before the due date. Having several negative remarks on your credit report can destroy your chances of getting a no money down home loan.

4. Expect a higher interest rate. Even if you have good credit, no money down home loans generally feature higher interest rates, which can increase your monthly payments.

5. Find a lender. Obtain home loan quotes from at least three lenders before submitting an application. Inquire about 100% financing. After obtaining the quotes, compare the loan terms, interest rates and other fees. Pick the mortgage lender that offers the best financing deal.

Tips & Warnings

• If you can't qualify for a no money down mortgage loan, consider seller-financing, in which the original homeowner carries the note until you're able to qualify for financing.

Resources

• Annual Credit Report
• Compare Home Loan Lenders