How to Purchase a home without a down payment

Learn how to purchase a home, even if you dont have the money to put down.

Instructions

1. If you are a prospective homebuyer, with little means of a down payment, you will want to read this. We know that when buying a home there is a lot of initial move in money that is needed. You have to consider down payment, taxes, closing costs, moving costs, etc. Before you know it, you're broke and haven't even moved yet. We realize in today's market, it is difficult to make a home purchase without a cash down payment, or perfect credit and income to get funded by a lender. In the past it was a lot easier to seek a purchase with out the money in hand to put down, but today, there are still options available for those of you who feel you have no option but renting.

2. If you are a first time home buyer, there are a few options available to you to get the home of your dreams with no money down. The most widely talked about one over the last few months is the first time homebuyers $8000 tax credit. In some cases, you can qualify for the tax credit, plus a VA or FHA loan to secure the financing. In a lot of cases, qualifying for both will result in a no money down purchase. How is this possible you ask? When you purchase the VA or FHA insurance loan, you are in turn protecting the lender from defaulting on the loan. You can only qualify for a VA loan if you are a veteran. When approved for the $8000 tax credit and securing it with the insurance, you will not be required to pay any money out of your pocket for the down payment, because it is fully covered. Keep in mind that you will have to pay an insurance payment every month or as needed once you take possession of the home. This is something your lender will discuss with you.

   Piggy back loans, although not as widely used as they were back before the market crashed, can still be considered when trying to purchase with no money down. In most cases these types of loans still require a down payment of at least 25 percent of the said loan, with the rest being borrowed from a mortgage lender, who will give you 80 percent of the purchase amount of the property, if qualified, yet you cant pay 25 percent of the piggyback loan you can get a second mortgage that will waive that. The second lender will pay the remaining 20 percent. In some cases, seller financing was an option that went along with the piggy backs. In this case, the seller will agree to give the title to the buyer, but would in turn be given the right to foreclose if the mortgage went unpaid for a said amount of time. Thus protecting the seller from being responsible for the default. Interest on these are typically very, very high. Higher than a conventional loan.

3. As the economy changes, so does the types of funding lenders give out. In todays market the most common and effective no down payment financing, is the First time homebuyers $8000 tax credit. Talk with your lender today to see if you qualify. When you find out that you do, you can start the search for your dream home!