"10 Ways To Buy A Home With Little Or No Money Down"
There are many ways to buy a home, even
if you have little or no money to put down. Here are a few
of the basics:
1. Sweat Equity
Sweat Equity is a way to get a home by trading work for
equity in the house. This could be used for a down payment
or for purchase later. This is a great technique if you
are handy with tools, yard-work, and paint.
Look for fixer-uppers in neighborhoods you are interested
in. Many times these homes will have a hard time selling
and the owner is ready for just about any offer. You will
find these houses ranging from just needing a little “cosmetic”
work like landscaping or painting, to totally trashed out
houses in need of some serious renovation. If you are into
repairs, this is a great way to get a home for a good deal.
If you are not skilled at repairs and renovation, be careful
about fixer-upper homes. They could end up costing you quite
a large amount of money to pay others to fix.
I also recommend getting a home inspection so that you
know what exactly you are in for before you begin.
2. Seller Carry-Back
Look for a home with an assumable loan. Instead of buying
out the owner's equity, ask the seller to carry back a second
mortgage for the rest of the money owed. If you can get
the seller to carry all of the rest, you can get the home
for no money down.
3. Offer an Object for the Down Payment
Offer something other than cash (land, a car, a boat, or
valuable collectibles) to the seller instead of a cash down
payment. This is why it is important to listen to sellers.
Find out what they want and need. Maybe you have (or can
get) just what they need. For instance maybe they wanted
to use the down-payment to buy an RV and it turns out that
you just happen to have one you don’t need. Offer that vehicle
as a down-payment, and it saves you from coming up with
the cash.
4. Offer Services for the Down Payment
Offer your services or expertise to the seller in lieu
of a down payment. Some examples include $10,000 worth of
auto services if you're a mechanic, dental work if you're
a dentist, desktop publishing services if you're a designer,
artwork if you're an artist or legal work if you're an attorney.
5. Foreclosures
Look for foreclosure properties that require little or
no down payment. Some lenders and government agencies will
let you buy a foreclosure with no down payment if your credit
is good and they're anxious to have the home occupied, or
if you have skills (carpentry, landscaping or even painting)
that you can use to increase the home's value. Distressed
properties - assume with little or no down to save foreclosure.
6. VA or Other No Money Down Loans
Look for conventional loan programs such as VA or FHA that
require little or nothing down. VA loans have helps countless
veterans get into their homes. There are often programs
available to first time buyers or people who are distressed
(such as with Hurricane Katrina) that will help people get
into a home with little money down. You usually will have
to qualify for the loan with the bank, though.
7. Find an Investment Partner for Equity Sharing
Look for an investment partner who'll put up some or all
of the cash in an equity-sharing partnership. You make the
monthly payments and the two of you split the eventual resale
profits.
8. Wrap-Around Financing
Wrap-around financing is where you assume a seller’s VA
Loan by doing a new Contract for Deed. Since this contract
is flexible and does not have to follow the old loan, you
can ask the seller to carry not only the loan amount, but
the rest of the purchase price of the house, letting you
get in with little or no money down.
9. Rent-to-Own or Lease-Option
This is really is one of the best ways to get into a home
of your own when you can’t get a bank loan. Remember that
you may still have to get a loan down the line. If you have
a lease-option for 5 years, at the end of that time, you
will need to purchase the house, so you can use the time
to fix your credit, or use one of the other options that
are discussed in our book to purchase the house at that
time. You can always try to negotiate another 5-year lease-option
if you need more time. (For more detailed infomation on
lease-options, check out our free ebook, "Buying a
Home When You Have Bad Credit" at http://I-can-buy.com.)
10. Government and Community Down-payment Programs
There are many community and non-profit organization programs
out there to help people get into homes of their own. Many
of these do no require any money down.
There are some organizations and programs that will pay
for some or all of the down payment for you. Generally these
are for lower to moderate-income individuals, but these
days that includes a lot of people. You also usually have
to be able to qualify for an FHA loan (which is somewhat
easier than a conventional bank loan.) If you have been
unable to get into a home because you don’t have enough
money for a down payment, then maybe one of these programs
will be for you.
Below is a list of organizations that have down payment
assistant programs:
• AmeriDream Inc.
http://www.ameridream.org
• National Home Foundation
http://www.nationalhomefoundation.org
• GiftAmerica Program (GAP)
http://www.giftamerica.org
• The Nehemiah Program
http://www.nehemiahprogram.org
• New Song Down Payment Assistant Program
http://www.buyers-assistance.com
• Equity Grants
http://www.equitygrants.com
• Realty America
http://www.realtyamerica.org
• Homes For All Program
http://www.ezdownpayment.com
Also check in your local area, because many communities
have similar programs of their own.
About the author
This has been an excerpt of the FREE ebook by Alex Dey called
"Buying a Home When You Have Bad Credit". Copyright
© 2005-2006 Mohave Publishing. All rights reserved.
Don't let bad credit stop you from buying a home. Check
out the ebook at http://I-can-buy.com
now to find out how!
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