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No Money Down Loans
By Ethan Hunter
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.
About the Author
Ethan 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
Article Source: http://www.simplysearch4it.com/article/7623.html
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