Here’s How To Buy A Home With No Down Payment

If you’ve continued to rent because you thought you needed a huge down payment to buy a home. Then you will be thrilled to know that you really can buy a home with no down payment and you don’t even need one of those late night info products to do it.

You can buy a home with no down payment by taking advantage of the USDA Rural Development loan. Even if you don’t have any money at all you can utilize this loan to get yourself out of the rent rat race.

The USDA loan is a normal 30 year fixed loan with a few perks that no other loan product offers.

One of these perks is that you can ask the seller to pay for your closing costs. The seller can pay up to 6% of the purchase price towards your closing costs. And in most cases this is more than enough. So, not only do you get to buy a home with no down payment, you don’t even need any money for closing costs.

You May Still Need Money With A No Down Mortgage

Now, if the seller won’t pay all of your costs, or maybe they only agree to pay a portion of them, you still need to cover the remaining costs somehow. And there is a simple way to do that.

The USDA loan will allow you to finance your closing costs. This is the only loan that offers this feature. But there is a catch.  The catch is that the home must appraise for more than what you have agreed to pay for the home. The other catch is that you can only finance in $10,000 of your mortgage fees. Don’t worry, $10,000 is way more than is needed in most transactions.

The risk with relying on the home to appraise for more so you can finance the fees is a little high. There is just no way to know that the home will appraise for more until the appraisal is completed. Just because you are getting a smoking hot deal on a home does not mean it will appraise for higher.

In other words be prepared with a back up plan. Such as getting a gift from a family member or borrowing the money from a 401K or other retirement account. You may also want to see if your city, county or state has any kind of assistance programs.

If you are ready to take that step form being a renter to a home owner, there’s no time like the present. Now you don’t have any excuses because you really can buy a home with no down payment.