HOW TO BUY A HOME WITH NO DOWN PAYMENT

You may be waiting to buy a home believing you need to save money for a down payment.

You may have cash to put as a down payment and may not want to use it. With interest rates as low as they are today, it may be wise for you to pay little or no down payment even if you have the cash.

Here are some reasons why you may want to consider buying a home for little or no down payment.

1. Home mortgage interest is one of the few tax deductions available for most people. Because you are eligible to deduct 100% of your mortgage interest from your taxable income you have a greater tax deduction the more you borrow.

2. Assuming your home appreciates in value, (There are no guarantees, of course.) your return on investment increases in direct proportion to how little you put as a down payment. For example, if your home appreciated $10,000 in one year and you put $20,000 as a down payment, you would receive a 50% return on your down payment…if you invested $10,000 as a down payment and your home appreciated the same $10,000, then you would receive a 100% return on your down payment…if you invested zero as a down payment, then your return on your down payment is infinite! Said another way; your home is probably your best investment you will ever make.

3. Take the money you would normally use for a down payment and put that money in another investment. If you don’t want to invest in the stock market, try a mutual fund or other investment vehicle that has a track record of getting a return on investment higher than the interest rate you are paying on your home mortgage. Of course, I would recommend buying rental real estate as my first choice in where to invest your cash. As was just mentioned in paragraph two, you have the opportunity to get a higher than average rate of return when you invest in real estate (Again, there are no guarantees.) If you don’t want to deal with tenants, hire a property management company to do all the work for you. If a rental house doesn’t appeal to you, why not invest in a vacation home somewhere. You have the opportunity to rent it, use it or do both. Treat you and your family to some fun you probably deserve!

4. You don’t have the money for a down payment! It’s the best reason in the world to buy now. Don’t wait to save up a down payment. The longer you wait you will probably pay more for your home plus run the risk of paying a higher interest rate. Waiting almost always costs more…The price of the house you want to buy usually goes up faster than you can save money…Buy today with no down payment!

Here are three ways to buy a home for no down payment:

1. If you are eligible for VA financing, you can buy for no down payment. Those people eligible for VA have served in the active duty military. If you qualify, not only can you buy a home with no down payment, you can also have the seller pay for all of your closing costs!

2. If you do not qualify for a VA loan, you can still probably buy a home with no down payment. Each month more and more lenders throughout the United States are offering no down payment home loans to anyone who qualifies. Those who qualify for these loans generally must have an excellent credit history. Ask your Realtor for a lender or mortgage broker in your area that allows you to purchase a home for no down payment.

3. There are at least two national non-profit organizations that offer non-repayable grants to home buyers for the purpose of using the money for a down payment on the purchase of a home. The requirements to receive the non-repayable grant are a motivated seller that will “contribute” some money at closing to the non-profit organization and a loan amount that does not exceed a pre set maximum amount. (The amount changes periodically.)

Contact me to se if you qualify for any of these no down payment loan programs.

It would be my pleasure to help you buy a home.

Please call or email me.