By: Dan Horan
How to Buy a Home With (Little or) No Money Down
Of course you want to buy a home in Ottawa with zero down payment. Who doesn’t?
Here’s exactly how you do it:
Many people never buy the home of their dreams simply because they don’t think they have enough money for the down payment. They’ve been told through the years that they need 10 percent or 20 percent of the purchase price in order to buy a home. Well, this simply isn’t true.
So why have so many real estate companies told them this?
Quite honestly, it’s because selling homes to people with 10 percent or 20 percent down is easier than selling homes to people who have little or no money for a down payment. Most real estate salespeople would rather go after the “easy sale” than try to help people who have special needs.
As a By Referral Only Consultant, my mission is clear: To Help People. That’s why we’ve created this special report and sent it to you with no obligation.
This report is specially designed for people with good credit and a good income, but who just don’t have much money for a down payment.
Option 1: Seller Financing
Some sellers may be willing to hold a second mortgage for you as a seller “take-back.” In this case, the seller becomes your lending institution. Instead of your paying this seller the full amount for the price of the home, and then making payments, you would be making monthly mortgage installments directly to the seller. It’s not unusual to find a seller who is willing to help you out, and in this case, it’s a win-win situation for all parties.
Option 2: Using A Tax Refund For A Cash Down Payment
By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself, and then you can use that refund as a down payment on your new house. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.
Option 3: Special Loan Programs
Special loan programs come and go quickly.
So, how do you find out what type of loan programs are available for you right now? The best way is to work with an experienced mortgage consultant who keeps up to speed on these special programs. If you don’t know of one, I work with at least three such mortgage professionals and I would be happy to refer you to one of them, depending on your particular needs.
Option 4: Owner Financing
Owner financing means exactly that: The owner (or seller) finances a portion of your home purchase. For example, you might borrow 80 percent of the value of a home from a lending institution, and “borrow” the other 20 percent from the owner. In this situation, the owner “carries back” a second mortgage.
Owner financing can be advantageous, especially to investors who buy up properties and then rent them out. For the average home buyer, however, owner financing is difficult to find and requires some tricky negotiating. Even after successfully negotiating a transaction, it requires some detailed work by qualified attorneys in order to protect the interests of all parties involved.
While you shouldn’t rule out owner financing, keep in mind that by looking for someone who is willing to help finance your purchase, you severely limit your choices. There are a lot of houses for sale today, but not a lot where owner financing is an option.
Option 5: Lease-To-Own
With a lease-to-own, you essentially lease a home, but make larger payments in order to begin accumulating a down payment. For example, if a house would normally lease for $800, you might lease it for $1,000/month, with $200/month going into a special account. At the end of a specified period, you buy the home using the money in that special account as your down payment. However, if you decide somewhere along the line not to purchase the home, all of the money in the special account then goes to the seller.
Think of this option as renting with a forced savings account. If you can find someone willing to do this, it’s not a bad option. However, most people who are selling their homes need their money out of it in order to buy their next home, so finding someone who is willing to lease to you may prove more difficult.
Where To Begin
Now that you have five good options for buying a home for little or no money down, where is the best place to begin?
The first step is getting pre-qualified. And the best way to get pre-qualified is to let me refer you to a Mortgage Consultant who is dedicated to helping people like you get into the home of your dreams.
I do more than help you get financed!
Financing is only the first step in the home buying process. I am dedicated to helping you through the entire process, delivering world-class service all along the way. We can help you find the right home, negotiate the right terms, and then make sure that you actually get to the closing table. It’s all part of our Preferred Buyer’s Program, which you can join for FREE!
If you’d like to know more about your financing options and my Preferred Buyer’s Program, be sure to call me today.