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A Zero Down Home Loan - Can You Still Get One?

By Edited Nov 13, 2013 0 0

It was not that long ago that we were seeing advertisements for a zero down home loan everywhere we looked. These days lenders have tightened their belts and raised their standards on how home loans should be given. If you want to own a home you will most likely have to come up with a down payment for the loan that you are trying to get. There are several advantages to paying money down on your new home and there are a lot of ways to come up with the money that you need for the down payment.

Since zero down home loans are virtually non-existent you may have trouble finding zero down home loan programs to help you. The amount of money that you have available to pay as a down payment on a house will determine your loan eligibility and what type of loan that you are able to get. The more money that you can put down on a house the smaller your payments will be each month. This is because the amount that you pay down is subtracted from the total cost of the house; therefore, you will need to borrow less money. Just because the rules have changed on home lending that does not mean that you cannot come up with enough money for a down payment.

Since you will probably not find a zero down payment home loan anywhere you will need to think of ways that you can raise money. You might want to set up an automatic savings plan. This is where a savings account is set up that is funded either through your direct deposit paycheck or money that you deposit into your checking account. If you have direct deposit at your work you can specify how much of your paycheck that you want to go into your savings account. You will need to set up a time line for when you need to have the money saved up so that you will be able to determine how much you will need to save. You can tell the bank how much you would like for them to take out of your direct deposit or out of your checking account each month and use that money for the down payment. A down payment savings plan is a great way to get to your goal of owning a home and it has the added benefit of teaching you how to be disciplined with saving money which you will need to do even after you are in your own home.

If a savings plan does not fit your time frame for purchasing a home, instead of a zero money down home loan, you may want to ask your friends and relatives if they may be able to help you out with some funds for a down payment. If several of them do have some extra resources to help you and you are on their good side you may find that each of them will be able to contribute a small amount. All of the small amounts will add up and be able to help you to have the money you need for your down payment. Some of your friends and relatives may have taken advantage of the zero down home loans that were available just a few years ago and understand your predicament well which could certainly help you.

If the previous two options do not work out for you then you may have to sell one of your assets to come up with the money. If you have any collectibles that you have been holding on to for a special occasion this could be the time to sell them and use the money for the down payment on your new house. A cherished piece of art or a squirreled away coin collection could go a long way towards making your home ownership dreams a reality. You may also consider selling a car, boat, or any other type of asset that you have that is worth enough money to cover the down payment. You may need to sell your car and take the bus to work for a year or two, but if it means you will be living in a home you own yourself it may be well worth the inconvenience. Since the rules on getting a no money down home loan have tightened up you may have to sacrifice something that can be replaced at a later date for the money that you need.

There are state and local government down payment assistance programs that help people to afford a down payment on their home. These programs used to be mainly for those people with low incomes but have been expanded some in the past couple of years. You may want to check into applying for one of those programs. You will want to find out all of the qualifications that must be met in order to receive help with making a down payment on your home. There could be income guidelines that you must fall into in order to qualify for assistance as well as other important factors, so be sure that you meet all of the guidelines before you invest your time.

The tightening of the rules on zero down home loan makes it a little harder to own a home if you do not have the money to pay the down payment on a home. Times change and the current home loan environment is just different than it was a year or two ago. So, you may not be able to get a zero down mortgage, but there are ways to come up with the money that you need. The suggestions above will get you started, but you may also consider liquidating any investments you have made in stocks and bonds or get a loan from your 401 K account. A home is a great investment that will last you for the rest of your life, and pride of owning your own home is priceless. There are a lot of ways to come up with the money that you need to pay the down payment on your home loan.




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