11 Ways to Buy a Home with Little or No Money Down

Have you found yourself in the middle of a “how to buy real estate” Ad as you scroll down your News Feed? Can you really buy a house with no down payment? Can you really make thousands or millions of dollars buying real estate? Of course the answer is “yes” and “no”.

The real question is, are you willing to pay anywhere from $500 to $60,000 for the information, classes and hotline? Most important, are you self disciplined enough to follow the program?

Before you spend money on these expensive programs, here are a few “no money down” ways to buy real estate. If you’re self-disciplined and willing to hear the word “no” many times before you get a “yes”, then maybe you can buy a house without a down payment.

1. First is to check out the many new zero down programs now available from lenders.

Especially if you’re a fist time buyer. Also FHA and VA have loans that may not be zero down, but are very close. There are many community and non-profit organization programs out there to help people get into homes of their own. Many of these do not 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.

2. Borrow money for the down payment.

Borrow the money from family, friends or a business partner at a high interest rate or a percentage of the profit when the property is sold.

3. Raise the price and lower the terms.

Offer the seller more than he is asking provided he is willing to accept the down payment in the form of a note. If the seller is asking $250,000 with $25,000 down and willing to carry the balance of $225,000. Try offering $260,000 in the form of a promissory not instead of cash. The seller gets a little more money for the additional risk.

4. Borrow against a life insurance policy.

Many life insurance policy’s let you borrow against the policy for the purpose of investing in real estate or other investments.

5. Use other property as collateral.

Create a note on existing property that you or a partner own and use it as the down payment for the property you are buying.

6. Home equity loan.

Home equity loans are generally easy to qualify for as long as there is adequate equity in the property. If you’d like to learn more about this type of loans contact a local financial institution or mortgage broker, as terms for this loan varies from institution to institution.

7. Seller refinance.

Have the seller refinance the property, receiving the cash he needs from the proceeds of the new loan, the buyer gives the seller a note for the balance of the seller’s equity.

8. Find an investor.

There are many people who have money but no time. Their current profession keeps them too busy. Work out a deal where they put up the money and you split the profits when you sell. This is of course for a fix and flip property.

9. Lease with option to purchase.

Lease a property with the right to buy it at some future time. Provide for the rental payment to be credited towards the down payment if you decide to exercise your 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 here to purchase the house at that time. You can always try to negotiate another 5-year lease-option if you need more time.

10. 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.

11. 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.

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