Buying a home with no money out of pocket

You can buy a home without needing any money for a down payment. Buying a home without needing a down payment is actually becoming very popular and the percentage of people buying a home this way is increasing each year. There are even ways to buy a home with no money down and no money out of your pocket for closing costs also. Consult a mortgage professional to find out if you qualify and to discuss your options.

One of the most popular ways to achieve a home purchase with no money down is to structure a "piggyback mortgage". A "piggyback mortgage" is actually comprised of two mortgages, a first mortgage and a junior mortgage. The two mortgages make up 100% of the purchase price of the property. As a result, the home buyer does not put any money down.

Buyers should expect to pay some money out of pocket when purchasing a home. However, this can be minimized with seller concessions and mortgage purchase programs that will allow closing costs to be added to the loan amount.

One way to buy a home with no money out of pocket is through seller concessions. With a seller concession offers for part of his proceeds to be used to help with the buyer's closing costs. Seller concessions of 1%-6% of the sales price are most common. Check with your mortgage broker to see if a seller concession can help you buy a home with no money down.

Fannie Mae and Freddie Mac allow 100% financing loans with up to 3% seller concessions to help pay for closing cost and prepays. While these loans may not cover all costs they are usually preferable to many subprime options because they do not have prepayment penalties and are usually fixed rates. Be sure to ask your lender or broker about the Flex 100 option.

No money down loans has had an increase in recent years. Some people have no other choice but to put no money down, but others choose to put the money they have to other uses. Many choose to spend the money on new appliances or furniture.

According to national data, the average homebuyer put down 3% when purchasing a home last year. While there are loans that will allow you to put no money down, the interest rate will be higher than if you made a down payment.

FHA requires at least a 3% minimum on down payment. However, "grant money/down payment assistance programs" can help you with the down payment if you do not have the funds available. Most mortgage brokers who are FHA approved are affiliated with several down payment assistant programs.