If you are considering buying a house with no money down, rest assured that this is indeed possible. These days with the housing crash still fresh in the minds of everyone, it's difficult but still possible to buy a house with no money down.
There are many resources out there online that will help you get a no money down home or subprime loans. You should spend some time looking at these potential resources to get an idea about what to expect. The more information you have about what's available in terms of bad credit lending and subprime mortgages, the better a position you will be in to make the best choices.
No Money Down through 100% Mortgage Financing
The first way to buy a house with no money down is to have good credit. You can approach conventional lenders to try and finance a home with no money down. This is very possible, as long as you have very good credit. With good credit, you can get 100% home financing, which is no money down.
Unfortunately, not everyone has stellar credit. Most people looking for no money down homes will have poor credit. Poor credit makes it much more difficult to get a no money down home because lenders are not usually willing to give out this type of loan.
There are essentially two types of loan: secured and unsecured loans. Unsecured loans are loans that don't have any collateral put up against them. In essence, the lender is giving you money on the assumption that you will pay the money back.
A secured loan is exactly that - it's secured by something. This something could be assets or cash. It's no surprise that it's remarkably easier to get a secured loan than it is to get an unsecured loan.
You may be able to get a home with no money down if you opt for a secured mortgage. You will have to back this secured loan up with collateral such as a real estate. If you are trying to buy a second house with bad credit, this may be feasible for you. You could use your first home as collateral for a secured mortgage loan for the second home. However, if you are not able to make the loan repayments, you lose both homes in one fell swoop - not exactly the best scenario. Indeed, most people will not be in a position to get a secured loan.
No Money Down Home with Subprime Loans
Another method that may or may not work is to seek out a subprime lender who can offer 100% financing. Subprime lenders specialize in giving out bad credit loans. Subprime loans are useful because if you can't qualify for a loan through conventional lender like a bank, you stand a good chance of qualifying for a loan offered by as subprime lender.
Now, it's important to note that subprime loans will have steep interest rates. You need to make sure you can cover the loan repayments with your income. The entire recent mortgage crises occurred because people were being given subprime mortgages when they could not possibly afford the loan repayments. With the whole housing crash, there are a many new restrictions in place - you will not be able to get a subprime mortgage now without a battery of checks being done on your financial condition. You still can get a subprime loan with bad credit, but it won't be as easy as it was.
To find a subprime lender, the best place is to look online. There are many of these types of lenders and each lender will have different loan terms and packages to choose from. It's crucial that you spend time comparing what's offered between various bad credit mortgage lenders. There can be a huge variance in the interest rates of the bad credit loans offered. If you want to get a bad credit home mortgage with no money down, you are going to have to scout out different options. You may find a bad credit lender willing to give you 100% home financing - depending on your credit and your current income.
No Money Down Home with VA Home Loans
Another option that may appeal to a certain people are VA home loans. These are special loans given to people who have served in the US army. The requirements for VA loans are quite low and they are no money down loans, depending on a person's credit. However, you have to have served in the US Army before you can apply to the VA Home loan program.
One of other option you can consider is owner financing. This is one of the best ways how to buy a house with no money down. Owner financing is basically where the owner of the house you wish to buy agrees to sell it to you directly. You make the payments to the owner instead of a bank. Now, the owner must own the home completely for this to work, but it can be one of the best ways to get a no money down home.
No Money Down Home with Owner Financing
Probably the most popular way to get owner financing with no
money down is for you to work out a deal with the owner where you can "rent"
the home for a period of time (usually two years) with the rent money going to
the owner as a sort of "down payment" on the home. At the end of the two years,
you get a mortgage which will be used to pay off the rest of the previously agreed
price on the home, minus the "down payment." This is one of the best ways how to buy a house with no money down.
Buying a house with no money down is still possible these days, though it is certainly more challenging than it was. However, a no money down home is easiest achieved when you have good credit. There are also some programs like the VA home loan program and the FHA Home loan program that will allow people to get no money down home, provided they have good credit. For people with bad credit, you can always look at subprime mortgage loans as an option - or owner financing to get a no money down house.