First Time Buyer Home Loans - How to Buy a Home with No Money Down
Buying a home with no money down can help you stop paying rent and start building equity. With so many programs out there for first time home buyers, you can find a loan that will fit your budget. Before signing any paperwork though, look at all your lending options. With online lenders, you can often find better financing than with your neighborhood bank.
What Buying a Home With No Money Down Can Do For You
A no money down mortgage can help you buy a home with little out of pocket expense. No money down can mean either no down payment or no closing costs paid up front. In either case, your rates and fees will be higher. But without the obstacle of thousands due at closing, you can get into a home easily.
Finding A No Money Down Mortgage
Many lenders, even sub prime lenders, offer no money down mortgages. The best source for loan quotes is online for easy access. You will want to look at the APR which will include closing costs. Even if those closing costs are rolled into the principal, you will be paying for them.
Most sites will have the options to check for a no money down loan. It will usually be a check box. If the option isn't available, send an email requesting a quote. Typically no money down loan rates are a couple of points higher than traditional loans.
Improving Your Home Loan Odds
No money down home loans increases the risk for financial companies. However, you can offset that risk be proving that you have the means to make payment. Large cash assets are what lenders are looking for. So you might consider increasing your savings account or CODs while applying for a loan.
Other factors, such as the housing market, your income, and credit history, will also affect your application.
Other Mortgage Options
While you may want a no money down mortgage, keep your options open. You may find a better deal by being willing to put down at least a small down payment. You can always tap into that equity with a second mortgage.
The other option is to finance your home purchase with two mortgages, usually held by separate financing companies.
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