It has always been important to buy and own a house and provide a warm shelter for the family. Just before the mortgage crisis, it was so easy to buy a home with no money down and with bad credit. However, that was what crashed the entire economy, so now home loan lenders are wary and you need to have perfect credit scores or a big down payment in order to get approved for a mortgage loan to buy your house. What if you have good credit, a stable job but no savings? Can you still buy a house with no money down today based on your circumstances?
We have our own reasons to buy a house but sometimes the need to do so may come unexpected. You may decided to settle down and get married all of a sudden but you have no savings. Are there home loan lenders willing to help you buy a house with no down payment but with good FICO credit ratings?
Many people rush into house viewing without understanding how much money they need to save for the down payment, thinking they can get 100% financing or no money down house purchase is still possible. Even if you can find a lender, being able to pay a substantial percentage of the house purchase price can save you money especially when you have no better use for it.
Buy A New House With Owner Financing And No Money Down
The best way to buy a new house with no money is to use owner financing or seller financing. You need to negotiate for the interest terms and the total loan term where the owner is responsible for carrying the home loan, such as 5 years. Most owners will ask for a balloon note where the balance for the purchase must be paid in full to the owner. This is achieved by refinancing the original home loan assuming you have sufficiently good credit to apply. Meanwhile you get to live in the house while making monthly payments to the seller.
The situation is entirely different for people that need to buy a house with low income jobs. Sometimes, the best way is to look for government housing grants for low income groups because if the monthly mortgage is too expensive, trying to find money for the down payment is a moot point to begin with. You are better off to continue renting a room and buy a house when you have better income. But when you can invite friends to invest in a property with you, there are mortgage firms that provide zero down house loans with the better credit histories on the owners.
To decide whether it is cheaper to buy a house or rent, estimate your monthly costs. when it is only slightly cheaper to rent, you should seriously consider buying your own house to start accumulating some wealth in property instead of paying your landlord.
You do not have to buy a big luxury home when it is clearly unaffordable. It is easy to get mortgage loans for cheaper starter homes when you are young, do not have established credit or your income is modest. You can sell off and upgrade to a better home in future when you have the money. If you continue to rent an apartment, you will not be able to save any money or build equity in a house you own.
Buy A House With Lease To Buy Option And No Down Payment
For people who expect their income to rise progressively such as young professionals, you can find mortgage companies that help you get a house with lease to buy option and no money down. This is similar to renting a house but have the option to buy it at a stated price at the lease end date. Like a house lease, you do not need to pay a down payment and the monthly payments are cheap. A lease option gives you a few years of time to save up for a bigger mortgage down payment, fix your bad credit problems and improve your income. Hopefully, at the home lease end, you can qualify for a new home loan and buy out your house.
The reality is that if you have bad credit, no money and low income, you should be addressing all these personal issues before thinking of buying a home with zero money down. Try to get a better job, avoid unnecessary purchases and use the extra funds to pay off your debts and fix your bad credit. This way, you will find it easy to get a mortgage loan in future.
When you want to buy a house with no money down, you need to have very good credit and maintain it. The monthly payments for your new home can be expensive, and it is easy to damage your credit score if you are late or in the event you lose your income. The best case is to have some savings that can be used to put money down on a home purchase. This will qualify you for cheaper mortgage rates, instant equity in the house and lower monthly payments. you have much higher chances to find a lender compared to zero down payment mortgage loans.