Buy a house with zero down & low monthly payments?
How to buy with no money down and low monthly payments.
You might be thinking, how is it possible to purchase a house or condo with no money down and obtain low monthly payments? Well in the current housing market it is possible and occurs quite frequently. Now how do you make this happen for you, well there are 2 pieces to the puzzle that you need to know going into your housing search. First you need to be allowed a seller concession and second obtain an 80/20 piggyback financing for the property with an Interest Only payment available.
Seller Concession
A seller concession occurs when the seller agrees to "give back" funds at closing to the buyer to cover closing costs. So if you, as the buyer, do not have the funds required for closing you can offer the seller an additional amount over the asking price with the agreement that the seller pays for the costs at closing. For instance, if the asking price is $100,000 you can offer $105,000 and receive a $5,000 seller concession. The seller is still receiving the $100,000 asking price and you are able to pay for the closing costs. In this scenario you are financing the closing costs which brings us to the second piece of the puzzle. You need to obtain the correct financing on the property.
Get low monthly payments
At this point you need to obtain the lowest monthly payments available. The best way to accomplish that with 100% financing is to break it up into an 80/20 piggyback scenario. Then select an interest only payment on the 80% loan. This will ensure you the lowest possible payment for that 100% (without having to pay a PMI obligation).
Remember that now you have inflated the purchase price to cover the closing costs therefore the property must appraise for that higher purchase price or the lender will not lend the full amount.
The road to ownership with zero down
This has become one of the most popular financing scenarios; obtaining 100% financing with a seller concession. The majority of buyers can now purchase their first home with no money at all. However before you decide to go this route please discuss your situation with a professional. There are certain criteria you need to meet in order to obtain 100% financing, please contact one of our trusted online mortgage lenders for assistance.
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