Buying a house with no down payment used to be easy. Unfortunately, since the huge housing crash, it is no longer easy to buy a house with no money down. But if you are looking for this type of deal, don’t despair; there are still some things you can do to make it happen.
Online Bad Credit lenders for No Money Down
One of the first places you should look for no money down mortgage loans is online. There are many bad credit lenders that may offer you 100% mortgage funding, depending on your credit history. People who usually are looking for no money down options on a house don’t have good credit history. If you are looking for no money down with bad credit, bad credit lenders are probably going to be your own option. There are many of these sub-prime lenders that may give you a loan. But you will need to look at different lenders’ websites to see what terms are offered.
Bank Financing for No Money Down
If you have good credit, you may be able to secure a traditional loan from a bank that covers the full value of the house – essentially, no money down.
VA Foreclosure for No Money Down
This is a very unique type of loan in that almost anyone can purchase a VA foreclosed home with a no money down option. It’s very easy to find VA foreclosed homes these days. With the huge string of foreclosures happening across the US, you can easily look on local real estate agencies for the information. You can, alternatively, look on the internet to find VA home foreclosures. You won’t have a problem finding any!
VA basically is an network the sells reposed homes. There are a few stipulations though, you must be a veteran or be on active duty in the army to qualify. If you aren’t, you are going to have to pursue FHA financing to get your home. But if you qualify, a VA home foreclosure is exactly what you are looking for.
Owner Financing for No Money Down
This is another option for no down payment homes. You and the seller basically negotiate a private deal. You then draw up a legally binding agreement that includes all the necessary details about the purchase (purchase amount, duration of the loan, etc). The difference with owner financing is that the owner, not the bank, receives your payments. This can be a fantastic way to get a no down payment home. If you are trying to buy a house with bad credit, this might be the best way to go about it.
Take over a Mortgage for No Money Down
This is one of the best options for buying a house with no down payment. These days with the housing market crash, most owners are finding it tough to sell their houses. There are more than a few owners who are willing to let a prospective buyer assume their mortgage if only to sell it. This benefits them because the are freed from the mortgage, or most of it (if the house is under market value, then they will have to cough up the difference on their own) and they will be in a position to buy another house should they wish. Now, you will have to meet a lender’s stipulations before you can assume a mortgage. In general, you will need to qualify for a mortgage and be able to pay any closing costs associated with the deal..
Lease/Purchase for No Money Down
A perennially popular option, the lease/purchase option is basically where a buyer “rents” or “leases” a home for several years, after which they agree to buy the full value of the home in that time.
There are several options here.
- The owner will accept the renter’s payments for a period of time in lieu of the down payment. By the end of the agreed duration, the buyer must come up with a loan for the rest of the property value, as originally agreed.
- The owner will lease the home to the buyer for a lower than market rate. After an agreed period of time, the buyer buys the house for an agreed sum. In general, the price you pay is going to be more than if you pay the market amount for the rental property.
If you suffer from bad credit, you should read these other guides for buying homes with poor credit history:
Despite the common public perception, you can indeed get a house with no down payment involved. In fact, you may actually end up getting a better deal than if you go to a bank and get a traditional home loan. It’s true that buying a house with no down payment is still not walk in the park, but as long as you are willing to explore your options, you should be able to purchase your house with out having to put in a down payment.