Just five years ago if you wanted a house you could find someone willing to arrange the mortgage. Since 2008, however, the “easy credit” period has ended for the average homeowner, and now banks like Chase and Citi may require 20 percent of the home’s value as a down payment and occasionally your first-born child.
But even in this new economy of tight-lending, there are ways to buy a home without a sizable down payment. Often, you’ll be required to do a bit of extra legwork to make it work, but if you’re willing to put in the time researching and seeking out the right opportunities, the homes are there for you.
VA Loans to Buy a House with No Down Payment
If you’re a veteran or you’re married to a veteran, you can use that status to buy your first home without any sort of down payment. The VA Loan, or Veteran’s Assistance loan, is one of the many benefits offered to servicemen who were honorably discharged or retired from military service. There are some qualifications for obtaining a VA Loan including the time you spent in the service and the amount of the home you’re considering. VA loans also have additional costs associated with them that are normally passed on to the seller, but they may be part of your bargaining for the final price of your new home.
Owner Financing or Self-Financing
Some home owners realize that the banks are making it sticky for potential new homeowners to buy a home or they understand there are other benefits to skipping the traditional mortgage. Some homes instead are financed by the current owner of the home. In this situation, the house’s owner extends credit to the potential buyer. There are many forms and legal experts must be involved, but instead of paying the bank for the next thirty years, you’re going to pay the owner. Some owner financed loans are for the full price of the home and others are for just the 20 percent down payment portion, giving the home owner two loans. This selection of homes is much smaller than the traditional real estate market, and you must be sure to have legal support and ample home inspections throughout the buying process as well for your protection.
Home Buyer Assistance Programs
Finally, certain buyers including those who are older, first time home buyers or looking for homes in a particular area can take advantage of home buyer assistance programs in various cities. While not every city has home buyer assistance programs, many do or there may be a program at the state level.
To use these programs you may be limited to where you can buy the home you’re seeking or to a particular dollar amount. As with anything government related, there will be a great deal of paperwork and diligence required, but once you’ve found a program and met the requirements, the home you’re seeking can be yours without waiting years to save up twenty percent of its value.
Rebecca Garland is working hard to populate the internet with relevant, engaging materials. She writes for many clients including MilitaryVALoan.com and enjoys a wide range of topics including home improvement and real estate. You can learn more about Rebecca on her professional site