How To Buy A Home With No Money Down!

So it really is quite amazing how liberal banks were with lending money back a few years back, but their purse strings have tightened up significantly in the last year or 2…

Buy a home with NO money down? Really? Yes, it actually can be done…we will show you how some folks do it. Of course, those are the ones who like living on the edge, one accident away from bankruptcy.

You Will Need:

* A good credit history
* At least three years of stable employment
* A healthy appetite for stress

Step 1:

Credit Check
Missed car payments, late fees from your credit card company, and that medical bill that went into collection never seemed to bother you before. You could check your credit for free online to make sure it’s good enough to get a mortgage. You can check your credit history on www.AnnualCreditReport.com once a year for free.

And, if your history needs some help, there are some services out there who specialize in helping fix bad credit histories. A quick internet search will give you scores of them.

Step 2:

Go For Broker
Call a mortgage broker who deals with many lenders. These real estate finance finaglers can manipulate the numbers way better than you can. They’ve got lots of “zero down” options. Sure, these guys typically get paid by the lenders, so if they happen slip in some extra fees – who cares! It’s just another cost you get to add to your already swollen monthly payment.

Step 3:

Ask Uncle Sam
Federal, state, and local government programs exist to help people get into home without a down payment- if you qualify. The largest government programs include those backed by the Department of Veterans Affairs (known as VA loans), the U.S. Department of Agriculture (or USDA), and the Federal Housing Administration (of FHA).

So, if you’re a US veteran or spouse of one, check out the VA loans. If you’re buying a house in a rural community, look into USDA loans. And if you have good ordinary income and credit, then research FHA loans as they are the easiest to secure.

Step 4:

Down Payment Assistance Programs
DPAP’s, or down payment assistance programs are non-profit and for low-income borrowers.Ask your realtor for help tracking some of these programs down.

Step 5:

Piggy Back Loans
Instead of one mortgage, try two. With a “piggy back loan,” you can pay for the house and get a home equity line of credit to cover the down-payment and closing costs you never paid for!

Step 6:

Private Mortgage Insurance
Now you might be asking yourself, isn’t this risky? Not if you get Private Mortgage Insurance, or PMI! Your lenders will be lulled into a false sense of security with your zero down plans. And if you default- the lender is covered by insurance.

PMI might cost more, but that just means you get more bills each month, and that means you are really popular, right?Typically, the premiums are $45 – $65 per $100,000 borrowed.

Step 7:

Creative Solutions
Still can’t find the down payment? Well, try asking the seller for help. You’d be surprised how accommodating some sellers are to make the sale. Some will take a promissory note from you in the amount of the down-payment to the mortgage company. Of course, you are still in the red up to ears, but it is another idea.

Talk to Mom and Dad and see if they can’t give you the down payment and take it out of your inheritance. Take an extra job.

Or, why not wait a few years? If not, look for a less expensive property where you can afford the down payment or wait until the off season (Nov – Dec, & July – Aug) to look for houses, when the prices might be better.

Step 8:

Cover Your Butt
Insure yourself for disability, medical, home, earthquake, liability. It’ll make the lenders love you more. You’ll pay tons every month, but at least you didn’t punk out like those other fools that actually put cash down up-front.

There are ways to get a home with no money down, but they are VERY risky. One misstep, one mistake, one accident, and you could end up sleeping on a nice comfy cardboard bed under the overpass.

Conclusion:

DON’T TAKE THIS SERIOUSLY!
This is a spoof I ran across a while back and StumbledUpon it again recently and got a good chuckle out of it. It’s strange to think how deep it went before lenders realized that they couldn’t hold these types of practices with money. Some people got the shaft, and some people made out alright with it. I have a 0 down house myself, but I could afford it and didn’t follow most of these rules. :)

Here it is in video format if you’re so inclined:

Filed Under: adviceDebtfinancial educationHouseNet WorthReal Estate

  • http://20smoney.com Kevin at 20s Money

    I think you will be hard pressed to find a bank that will provide a loan with no money down these days. In markets like Florida, California, Arizona, forget it. You’re gonna need at least 10%.

    Kevin at 20s Money’s last blog post..How The Swiss Got Rich: The Zurich Axioms Part 1

  • http://www.investmentplayground.net investmentplayground

    No-money down programs do still exist. As much of a “spoof” this entry was – he’s actually quite accurate. If you have great credit and the banks don’t have any reason to believe you’re a risk, even in this market, you probably would be approved for one. The next stop is actually finding the lender who’ll provide a piggyback or seller carry. However – your payment “swells” so high that these plans don’t make much sense for anyone, no matter how good your credit is. PMI is basically pissing money away regularly and consistently. I was approved for a low money down program years ago, and boy do I wish I didn’t go down that road.

  • http://www.financialhat.com Mark Nelson

    There are still ways to do no money down. But they are hard to find. You have to have very good credit. It is much easier for the brokers to do a re-fi without any money.

    I bought a 4-plex with zero down and with a piggy back 3 years ago. That would be tough to do today.

    Mark Nelson’s last blog post..Keeping Focused and Moving Forward

  • http://www.onfinancialsuccess.com Aaron Stroud

    Very funny post and video. It reminded me of Ben Stein’s How to Ruin Your Financial Life. It’s amazing how easy it is to kid ourselves when we really want something.

    Aaron Stroud’s last blog post..Who to Listen to and Who to Ignore

  • http://www.reachtogether.co.uk Neil at Fractional Ownership News

    A sadly funny spoof. Are you sure you’re not an investment banker? Your spoof ideas about money seem to be the same as theirs were !

    Neil

  • Pingback: Just Got the Car Title Edition: Prime Time Quick Hits | Prime Time Money

  • http://www.stepforwardsystem.com Joe White

    Surprisingly, there IS still a way to get into a house with no money down. Of course, it’s a non-traditional means of obtaining real estate, but it certainly can be one heck of a viable option. Especially for those looking to invest in today’s market with little or no out of pocket expense.

  • Pingback: Weekend roundup | Sense to Save

  • Pingback: Weekend Roundup | Remodeling This Life

  • Pingback: Festive Link Love Carnivality #17 | Free From Broke

  • Christine

    The organization here that provides no-money down loans is Mennonite Housing. If you qualify, $27k for 1 or 2 people 7 years ago (I don’t have the recent figures and their website is no help), for $500 and 100 hours of sweat equity, they will pay your closing costs. They put a 3 year lien on the house.

  • http://nicholasf.wordpress.com Promisor

    Aaron Stroud, I love that book! Ben Stein used to be one of my favorite author’s and analyst but I find that he is following the policies of the Fox news network. Quite sad considering he is such a brilliant independent thinker.

    Promisor’s last blog post..What Exactly Is a Promissory Note?

  • http://iluvcontest.blogspot.com Sherry

    interesting I really want to know who have tried that.

    Sherry’s last blog post..October $25 Gas Card Giveaway

  • http://www.fractionalhomeownership.net/ Chester @ Fractional Home Ownership

    Scary to think that no so long ago this stuff really worked!! Not sure that banks would be willing to lend with any of these steps. Though i guess desperate times call for desperate actions.
    .-= Chester @ Fractional Home Ownership´s last blog ..What’s better: vacation ownership (fractional ownership) or timeshare? =-.

  • http://subject2.com Nick@Subject2.com

    that’s some funny stuff!

    Now a days, Subject-To investing will become popular again.
    .-= Nick@Subject2.com´s last blog ..Discovering How To Make Money In Real Estate =-.

  • Herbert

    Enjoyed reading your post :) Buying a home is one of the biggest financial decisions one makes in their life. Great tips…. will take them with a grain of salt.