10 Ways to Buy a Home With Little or No Money Down Part 1
There are many ways to buy a home, even if you have little or no money to put down. Here are a few of the basics:
1. Sweat Equity
Sweat Equity is a way to get a home by trading work for equity in the house. This could be used for a down payment or for purchase later. This is a great technique if you are handy with tools, yard-work, and paint.
Look for fixer-uppers in neighborhoods you are interested in. Many times these homes will have a hard time selling and the owner is ready for just about any offer. You will find these houses ranging from just needing a little cosmetic work like landscaping or painting, to totally trashed out houses in need of some serious renovation. If you are into repairs, this is a great way to get a home for a good deal.
If you are not skilled at repairs and renovation, be careful about fixer-upper homes. They could end up costing you quite a large amount of money to pay others to fix.
I also recommend getting a home inspection so that you know what exactly you are in for before you begin. ( A MUST!)
2. Seller Carry-Back
Look for a home with an assumable loan. Instead of buying out the owner’s equity, ask the seller to carry back a second mortgage for the rest of the money owed. If you can get the seller to carry all of the rest, you can get the home for no money down.
3. Offer an Object for the Down Payment
Offer something other than cash (land, a car, a boat, or valuable collectibles) to the seller instead of a cash down payment. This is why it is important to listen to sellers. Find out what they want and need. Maybe you have (or can get) just what they need. For instance maybe they wanted to use the down-payment to buy an RV and it turns out that you just happen to have one you don’t need. Offer that vehicle as a down-payment, and it saves you from coming up with the cash.
4. Offer Services for the Down Payment
Offer your services or expertise to the seller in lieu of a down payment. Some examples include $10,000 worth of auto services if you’re a mechanic, dental work if you’re a dentist, desktop publishing services if you’re a designer, artwork if you’re an artist or legal work if you’re an attorney. (Get Creative!)
5. Foreclosures
Look for foreclosure properties that require little or no down payment. Some lenders and government agencies will let you buy a foreclosure with no down payment if your credit is good and they’re anxious to have the home occupied, or if you have skills (carpentry, landscaping or even painting) that you can use to increase the home’s value. Distressed properties – assume with little or no down to save foreclosure.
Above are the first 5 ways to Buy a Home with Little or No Money Down. Hopefully, it was helpful and will assist you on your path to homeownership and/or real estate investing.