If someone told you that you could buy a home with little money down, would you believe them? Perhaps you should reconsider. Buying a home with little money down can be a possibility with some help and a little planning. Here are some options to consider:
1) Buying a home with a “seller carry back” is a popular option. The trick is to find a home with an assumable loan. You would ask the owner to carry a second mortgage on the home, equal to the equity. In this scenario, you could get in for very little money.
2) Bartering for down payments is also a very popular way to address the down payment issue. Instead of cash, you might offer an item of value. Some people are also bartering their own sweat equity, in exchange for down money on the home. You might offer legal or medical services, home or auto repair, etc., depending upon your skill set.
3) In the current foreclosure market, you may be able to find a good deal on a foreclosure property. There are many lenders that will let you get into one of these homes for no money down, in order to get a better price for the home. Distressed properties are often sold this way. If you have the ability to due repairs, it could save you a ton of money.
4) VA and FHA loans require little money down as well. You might be looking at as little as 3%. If your credit is good, you could even beat that. If you know someone who wants out of such a loan, you might also want to negotiate a contract for deed. They may be able to carry the whole value of the property.
5) Rent to own homes, or homes sold by lease option may be just the deal for you. In this case, all or some of your monthly rent can go towards a down payment on the home. If you need some time to fix credit, this might just be the way to go. Try to get a 3-5 year lease. In that time, you can repair credit, and be prepared to get a loan for the remainder. If you walk away from the deal, though, you typically will forfeit your money as pure rent.
6) There are many new government and local community programs springing up, that are designed to help people get into homes for little to no money. In exchange, the person must be willing to look at homes that are located in economically distressed areas. This is a good option for people of low to moderate incomes.
Our team at Showcase Realty can help. We have a team of experts who can work with you to determine your financing options.