10 Ways to Buy a Home With Little or No Money Down

There are many ways to buy a home, even if you have little or no money to put down. Here are a few of the basics:

1. Sweat Equity

Sweat Equity is a way to get a home by trading work for equity in the house. This could be used for a down payment or for purchase later. This is a great technique if you are handy with tools, yard-work, and paint.

Look for fixer-uppers in neighborhoods you are interested in. Many times these homes will have a hard time selling and the owner is ready for just about any offer. You will find these houses ranging from just needing a little cosmetic work like landscaping or painting, to totally trashed out houses in need of some serious renovation. If you are into repairs, this is a great way to get a home for a good deal.

If you are not skilled at repairs and renovation, be careful about fixer-upper homes. They could end up costing you quite a large amount of money to pay others to fix.

I also recommend getting a home inspection so that you know what exactly you are in for before you begin.

2. Seller Carry-Back

Look for a home with an assumable loan. Instead of buying out the owner’s equity, ask the seller to carry back a second mortgage for the rest of the money owed. If you can get the seller to carry all of the rest, you can get the home for no money down.

3. Offer an Object for the Down Payment

Offer something other than cash (land, a car, a boat, or valuable collectibles) to the seller instead of a cash down payment. This is why it is important to listen to sellers. Find out what they want and need. Maybe you have (or can get) just what they need. For instance maybe they wanted to use the down-payment to buy an RV and it turns out that you just happen to have one you dont need. Offer that vehicle as a down-payment, and it saves you from coming up with the cash.

4. 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.

5. Foreclosures

Look for foreclosure properties that require little or no down payment. Some lenders and government agencies will let you buy a foreclosure with no down payment if your credit is good and they’re anxious to have the home occupied, or if you have skills (carpentry, landscaping or even painting) that you can use to increase the home’s value. Distressed properties – assume with little or no down to save foreclosure.

6. VA or Other No Money Down Loans

Look for conventional loan programs such as VA or FHA that require little or nothing down. VA loans have helps countless veterans get into their homes. There are often programs available to first time buyers or people who are distressed (such as with Hurricane Katrina) that will help people get into a home with little money down. You usually will have to qualify for the loan with the bank, though.

7. Find an Investment Partner for Equity Sharing

Look for an investment partner who’ll put up some or all of the cash in an equity-sharing partnership. You make the monthly payments and the two of you split the eventual resale profits.

8. Wrap-Around Financing

Wrap-around financing is where you assume a sellers 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.

9. Rent-to-Own or Lease-Option

This is really is one of the best ways to get into a home of your own when you cant 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 in our book to purchase the house at that time. You can always try to negotiate another 5-year lease-option if you need more time. (For more detailed information on lease-options, check out our free ebook, “Buying a Home When You Have Bad Credit” at http://I-can-buy.com.)

10. Government and Community Down-payment Programs

There are many community and non-profit organization programs out there to help people get into homes of their own. Many of these do no 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 dont have enough money for a down payment, then maybe one of these programs will be for you.

Below is a list of organizations that have down payment assistant programs:

AmeriDream Inc.

http://www.ameridream.org

National Home Foundation

http://www.nationalhomefoundation.org

GiftAmerica Program (GAP)

http://www.giftamerica.org

The Nehemiah Program

http://www.nehemiahprogram.org

New Song Down Payment Assistant Program

http://www.buyers-assistance.com

Equity Grants

http://www.equitygrants.com

Realty America

http://www.realtyamerica.org

Homes For All Program

http://www.ezdownpayment.com

Also check in your local area, because many communities have similar programs of their own.

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Don’t Sell Your Property Without It

For most people, the prospect of selling their home can be positively daunting. First of all, there are
usually plenty of things to do just to get it ready for the market. Besides the traditional clean-up, paint-up, fix-up chores that invariably wind up costing more than you planned, there are always the overriding concerns about how much the market will bear and how much you will eventually wind up selling it for.

Will you get your asking price, or will you have to drop your price to make the deal? After all, your home is a major investment, no doubt a rather large one, so when it comes to selling it you want to get your highest possible return. Yet in spite of everyone’s desire to get the top dollar for their property, most people are extremely unsure as to how to go about getting it. However, some savvy sellers have
long known a little financial technique that has helped them to get top dollar for their property. In fact, on some rare occasions, they have even sold their properties for more than they were worth using this powerful financing tool. Although that might be the exception rather than the rule, you can certainly use this technique to get the most money possible when selling your property.

Seller carry-back, or take-back financing, has proven to be a surefire technique for closing deals. Even
though most people do not think about when it comes to selling a property, they really should consider using it. According to the Federal Reserve, there are currently over 100 Billion dollars of seller carry-back (seller take-back) loans in existence. By any standard, that is a lot of money. But most importantly, it is also a very clear indication that more people are starting to use seller take-back
financing techniques because it offers many financial benefits to both sellers and buyers. Basically, seller take-back financing is a relatively simple concept. A seller-take back loan is created when a property is sold and the seller performs like a lender by assisting in financing all or part of the total transaction. In effect, the seller is actually lending the buyer a certain amount of money toward the
purchase price, while a traditional mortgage company usually funds the balance of the purchase price. A seller take-back loan is secured with the property. The loan then becomes the primary mortgage and is fully secured by the property. In most seller take-back financing transactions, the buyer repays the seller with interest in accordance to mutually agreed terms over a period of time. Usually, the terms call for the buyer to send the payments, consisting of principal and interest, on a monthly basis. This is
advantageous because it creates a steady monthly cash flow for the note holder. And if the note holder decides to cash out, he or she can always sell the note for a lump sum cash payment.

Regardless of market conditions, seller take-back financing makes sound financial sense; whereas, it provides both buyer and seller with flexible financing options, makes the property easier to sell at higher price and shortens the sales cycle. It also has the added advantage of being an excellent investment that generates a steady cash flow and high return. If you ever need immediate cash, you can
always sell the note through our office. If you are planning to sell a property, then consider the many
benefits of seller take-back financing.

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Ways Renters Lose Money

Are you still renting a home or apartment for yourself or your family? If so, you’re losing money. Think about these three ways you lose money by renting:

1. You’re paying for someone else’s mortgage payment. You’re missing out on the appreciation that the property gives to the landlord. Appreciation is a term used in accounting relating to the increase in value of an asset, which means in real estate terms, added value to the property. Over the past five years, houses appreciated significantly, making many new real estate investor multimillionaires.

2. Renters don’t get to freeze their monthly housing expenses like home buyers can. Of course, many home buyers get mortgage payments with adjustable interest rates and their payments go up over time. However, these payments will not go up over the long term like rising rents. Just think about how much an apartment costs today compared to ten years ago. A two bedroom apartment in Lake Elsinore, California leases for $1,000 today. The exact same apartment rented for $325 in 1996, when it was brand new. Home buyers who had low monthly payments in 1996, who did not refinance their mortgage, enjoy low payments and don’t have to worry about rising rents.

3. Renters don’t benefit from tax advantages. Home owners get income tax deductions. Tax deductions for interest costs, for instance, save tax payers thousands of dollars. Emotional Satisfaction of Home Ownership besides losing out on making money with real estate, renters don’t get the same satisfaction of home enjoyment that benefits home buyers. Many landlords won’t allow you to paint your walls in colors that you desire. Also, you won’t feel like fixing up the property with custom window coverings and you get little say in flooring materials. Because you can’t make your personal statement, you won’t feel like you’re HOME as much as home owners who feel emotionally connected to their property. How to Buy Your First Home, the biggest barrier to home ownership is often accumulating funds for a down payment. People think they have to have thousands of dollars for a down payment. However, if you have good credit and a decent job, you can get a mortgage for a home with zero down. And you can finance some of your closing costs as well as ask the seller to help you pay a good portion of your purchase costs. With today’s mortgage finance plans, you may be surprised to find out how much of a home you can afford with payments similar to what you currently pay in rent. You may have to go out of the major metropolitan areas to buy a home. That’s why so many people commute in Southern California. Affordable housing costs much less in outlying areas. But so do the rents. If you’re renting an apartment for $2,300 in Los Angeles, you could buy a $500,000 home in Wildomar. Our daughter just purchased a home in December 2005 and her mortgage payment, for a 3,000 square foot new home, costs less than $2,300. With her tax savings, she will pay even less than renting a small apartment closer to downtown L A. If these amounts sound high to you, check your local area. Perhaps your monthly rent is only $1,000 and houses cost less than $200,000. Talk to a mortgage loan officer and see how much of a home you can afford. If you’re renting, make one of your priorities to buy your own home. Copyright 2006 Jeanette J. Fisher

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A Bit About Mold

There are a number of little things to look out for when purchasing a new home. Normally the things to consider includes such things as location, wiring, the condition of the house itself, and several other factors. One of these factors that the home buying public is becoming more concerned with is mold. There are many different types of mold that can occur in a home and lead not only to structural damage, but some health concerns as well. Mold is difficult to find in many homes as it grows exclusively in dark and moist areas that are usually hidden somewhere in the structural areas of the home such as attics and basements. By the time mold shows up in the actual living areas, chances are that it is all through the home.

One of the most likely places for mold to form is anywhere that moisture is improperly vented. Another area of concern is if a home has ever flooded and was not completely or properly cleaned and dried after. Leaky plumbing and basement crawlspaces are other likely candidates. Mold can be a difficult thing to completely get rid of as the only thing it needs to continue growth is an organic material such as wood, and moisture. Both of these items are usually abundant in any home. The most likely was that moisture finds its way into the home is through faulty or leaky roofs and foundations. Both of these areas should be checked over by an experienced mold inspector on a fairly regular basis if there is any worry of mold beginning to grow, or if these have been mold in the past. Mold can be an expensive problem to deal with so be pro-active about looking for it, it can save you money in the long run.

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