Home Buying in 27617>Question Details

Elizabeth Mc…, Home Buyer in Raleigh, NC

Is it possible for my partner and I to buy a home with no money down?

Asked by Elizabeth Mcstoots, Raleigh, NC Wed May 21, 2014

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It is nearly impossible to get 100% financing through a bank. It is possible to buy property with no money down. Not all of these methods will work for every transaction or with every lender.
1. Roll the down payment into the purchase price. Depending on your credit rating and lending history, some lenders will allow you to finance 100% of the purchase price. This will cause the interest rate and your payments to much higher than if you put money down. But, if you intend to sell the property quickly, it shouldn't have much of an effect on your profit margin.

2. Negotiate a separate installment plan for the down payment. Sometimes the seller will allow you to pay the down payment on a monthly basis.

3. Trade something other than cash. This could include land, a car, a boat, jewelry or valuable collectibles. Find out what they want and need. Maybe you have, or can get, just what they are looking for. You could also trade services such as carpentry, auto mechanics, painting, dental work and other services that you can do for the seller over time.

4. Trade houses with the seller. Many professional investors acquire homes with no money down by trading one property for another. In some cases, they trade one large property for several smaller rentals. Property trading is also a legal way to avoid the capital gains associated with selling a property.

5. Get the seller to transfer their mortgage to you. This is a common occurrence in foreclosures where the homeowner is eager to sell and is willing to work with the buyer. You can do the deal as an assignment of contract and efficiently close the sale.

6. Apply for a loan assistance program. Talk to your bank, many lending institutions offer programs that allow buyers to put little to no money down on real estate purchases.

7. Find an investment partner. Look for an investment partner who will put up some or all of the cash in an equity-sharing partnership. You make the monthly payments and the two of you split the eventual resale profits.

8. Find a property to rent-to-own or lease with an option to buy. If you have a lease-option for 5 years, at the end of that time, you will need to purchase the house and can get a bank loan then. Meanwhile, you can use the time to fix your credit and/or save for a down payment. Some contracts may put some or all of the rental amount towards the down payment.

9. Get owner financing or a land contract. Another option is to have the seller act as the bank. You make your payments, including interest, directly to the seller. Then after usually 3 to 5 years you make a lump sum payment to the seller. During this time, you should have enough equity to qualify for a standard bank loan.

10. Use a home equity line of credit from another property. If you have equity in another property, you could use that equity as a down payment on purchasing another investment property.
1 vote Thank Flag Link Thu May 22, 2014
Yes, it is still possible. Some Triangle local lenders have 100% financing options (albeit at higher interest rates) and no restrictions on which areas to buy in (as with USDA loans). With 100% financing, and negotiating to have sellers pay your closing costs, you could potentially get into a home with no money down.
0 votes Thank Flag Link Thu Aug 7, 2014
USDA provides 100% financing but the process takes a little bit longer than a conventional loan. My clients closed last week and only had to bring $225 to closing on a $229,000 home.
0 votes Thank Flag Link Tue Aug 5, 2014
Try NC Housing, they have a down payment assistance program called NC Advantage. Call me if you would like to discuss further 919-696-6675 just ask for Joe.
0 votes Thank Flag Link Thu Jul 17, 2014
Hi Elizabeth, there are still some areas of 27617 that you can get a USDA financed property as well as the neighboring 27703. You can check the address at the USDA eligibility page here http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do There are income limits and geographic boundaries...but it is possible.
0 votes Thank Flag Link Mon Jun 30, 2014
So Simon covered a number of financing methods that could allow you to purchase a home with no down payment, including some strategies often used by investors such as a joint venture with shared equity, although you may then have to meet additional requirements from your primary lender on the first mortgage (they like to know you have skin in the game, as it were).

I would add one thing for our region, you could consider a USDA loan, which would finance 100% of the property and has very favorable terms. These loans are generally designed for more rural areas, but because of the layout of the Triangle you can find properties close to destination spots and major thoroughfares that still qualify for USDA financing. I'm working with several folks right now that are pursuing this strategy, so if you'd like to discuss properties on the market and what areas are eligible I'll be happy to walk you through it.
0 votes Thank Flag Link Fri May 23, 2014
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