Purchasing Real Estate with No Money Down

Purchasing Real Estate with No Money Down

Today, tons of people are purchasing homes with absolutely no money down. This is definitely possible and you would be surprised at the number of people who have purchased a home with zero down. Some states and provinces have limits on the amount of money you can spend on a home that is being bough on zero down payments. Most states have their limits around the seven hundred thousand mark, while others are lower. You first need a mortgage professional to help you with this, as you cannot approach it on your own.

There are several mortgage programs and assistance programs available for people to use when buying a home with zero down payments. There are two major ways this is done. The first method is when the lender offers you the chance to get a full loan approved for the total amount of the home. This is what many people want, but it only exists for people who fall under a certain category. If you want a single loan where you get approved for the entire amount, you need to be able to show financial stability. You need to have a good credit rating and a well paying job. Savings would be an extra bonus. Income is shown through your annual income taxes, weekly pay stubs and work forms. Even if you have a good income, and can't prove it, you won't be given the chance to take up the loan.

The second option is to go for sub-prime, which is for individuals with a questionable credit rating or a less than average income. Buying a home with bad credit is hard on its own, so buying with no money down will be quite the task. There are some lenders who specialize with people with bad credit, so those firms may be able to better help you. Instead of a full 100% loan, there are the eighty to twenty mortgage options. With this type of plan, you will need to make two different mortgage payments. The one benefit people see with this option is that they save a bit of money since the mortgage insurance is only applied to lesser of the two.

One popular program is known as the down payment assistance program, which will help you purchase a home with zero down. There are other loan options such as the FHA mortgage program, which requires a small down payment on your part. However, using the assistance program this can be waived. If you have a not so great credit rating or if you don't have the money to make a down payment, all you have to show is that you are able to make payments on the monthly mortgage invoice. You will need to be able to show income statements to prove your income, as this is the biggest criterion that lenders consider.

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