No Money Down Home Loans Explained
By Emiel L.
Admit it: everyone wants to have a house – a really nice house where you can just crash after a long day at work or where your kids can safely grow up and have a great time creating memories. Unfortunately, having a “nice” house these days means coughing up about $100,000 as down payment for the property. And that still does not include the rest of the house’s cost, taxes, loan interests and other incidental expenses like the cost of hiring a moving crew, transporting your entire family to the location, getting new furniture, etc. Assuredly so, many people do not actually find scraping together that much money as a very easy thing to do. Instead of giving up your dream house as a lost cause, you may want to look into no money down home loans.
As the name suggests, the no money down home loans are lending schemes wherein you can acquire your very own property without putting up a large amount of cash as down payment. Some loans can be acquired without any money down option at all, while others require other sorts of compensations like a 2% to 5% down payment, or a loan that pays off at 102% to 105%. As such, there are different types of these aforementioned loans. The most notable and popular of these include: the Veterans Affairs or VA home loans, VA foreclosure, seller assisted closing loans and direct lease-purchase transactions, among many others.
Veterans Affairs or VA home loans is usually offered to members of the Army, Coast Guard, Eligible Service and the National Guards, both for its active and retired service people. VA foreclosures are properties being placed back into the market and can be gained by people outside the military services.
Seller assisted closing loans work around the principle of direct transaction. A home seller and the buyer will agree on a set amount for the property. The buyer can then offer to pay the supposed down payment (around $5,000) at the closing of the deal.
Lastly, lease purchase transactions work around the principle of most rent-to-own properties. The house seller will set a price which should be payable on a future date. In the meantime, the house buyer agrees to pay for a fixed monthly “rent” or “lease” price.
As such, there are lending institutions that offer or specialize in such loans. However, in order to safeguard your money and your new home, it would be best to seek financial aid from lending institutions that are known to be reliable like Countrywide (private lender,) Federal Housing Administration (government program,) and the Department of Veterans Affairs loan program (another government program.)