Buying a House with No Money Down

It’s everyone’s dream to own a home. These days, with the economy in shambles, the American dream seems more like a pipe dream. Houses no require large down payments or perfect credit ratings, backed by solid equity. Are the days of buying a home with no money down over?

There could be many reasons why you want to buy a house with no money down. Read the following tips for getting that house without having to pay upfront.

If you don’t have the money to buy a new house, one great way to get the home with no money down is to look into seller financing. With seller financing, it’s possible to get a no money down house purchase.

You can also partner with a friend and buy a house together. If you team up, you may even find a few mortgage firms offering zero down house loans (this can change depending on the economic climate). With two people (and two seperate credit histories) it may be possible to buy a house with no downpayment.

It’s interesting that most people consider the down payment on a house as an afterthought – most people want to purchase to house immediately, though secured or unsecured loans. However, saving up for a down payment can save you money. Think of it like this, if it costs you $500 more a month to own a house rather than renting, but you choose to rent instead. You would have $18,000 to use as a down payment and if property values dropped in that time. So it may be worth it to just rent WHILE saving up for a future down payment.

If your problem is simply not just a shortfall of cash but a low income job? If this is the case, you may want to consider buying at another time. The golden rule is that when the cost of buying property is much higher than is the cost of renting property, it’s not a good idea to buy. But if the costs are about the same (to rent and to buy), put every bit of effort possible to get a house/apartment instead of renting. In the long run, you’ll make money.

If you can’t reach the high fruits, aim for the low fruits. One option to consider is purchasing a cheaper home – often called a “starter home.” This “budget home” may not appreciate so much in terms of the house, but the property value may go up.

If you currently own a home and are under thread of forclosure, you could consider trying to sell your home, getting a bad credit remortgage, or downgrading to a cheaper home like one of these budget homes (note that even fast remortgages won't save you from forclosure if you wait to long). The point is that you need to fix up your credit.

If you are considering buying a house with no money down and you are expecting your income level to rise, you can shop around for a lease-option. This is basically where you rent a house with an option to buy it within a certain period of time (usually a couple years). This will allow you time to save up some cash, make repairs to your credit, and increase your income level. In a couple years, you might just qualify for a loan and buy the house at the set agreement.

One last method of buying a house with no money is to consider purchasing a small property lot. Sellers dealing in small property lots may not pay as much attention to your credit ratings and often won’t require a significant down payment by the buyer. This is because property is less vulnerable to damage (and thus depreciation) then is a house. This gives sellers much more confidence when selling it. If you can get a small lot, you can spend a couple years getting your finances and credit history together so you can qualify for a mortgage loan, and then place a house on the lot.

Now, if you can't secure a traditional loan, it should be your first priortiy to FIX YOUR CREDIT. Many of the problems of buying things with bad credit can be fixed if you simply restore your credit. While I realize this is difficult, it is certainly achievable with work on your part. If you are overburdoned by debt, you can opt for debt consolidation loans with bad credit or if in danger of losing your current home a fast remortgage to renegociate for better remortgage interest rates.

It's important that you undestand how to manage with bad credit. I recommed these hubs.

• How to Buy a House with Bad Credit

• How to Buy a Car with Bad Credit

• How to Get a Loan with Bad Credit

Conclusion

When trying to buy a home with no money down, you need to look at all the possibilities and select one that best fits you. Now, the best case scenario will to always put money down on a house – this will mean better interest rates and lower monthly payments – you also have a higher chance of securing a loan if you have bad credit as well. But, for those of us who don’t have the option of putting money down on a house, there are options out there for you to buy a house with no money down.