Can you rally buy a home with no money down?
You’ve probably seen the ads and the commercials insisting that you can buy a home with no money down, but can you really do it or is it just another scam? Believe it or not, you really can buy a home with no money down and most of the time there’s nothing fishy about it.
The majority of no-money-down home owner’s programs are for first-time home buyers. This is in the form of a homeowner’s grant. Many states offer homeowner’s grants for first time homebuyers. These grants will usually cover from about three percent of the purchase price of a home, giving you the funds you need for the down payment. If you’re lucky, you can get the seller to pay your closing costs, which would mean that you come to closing with no out-of-pocket expense.
Another way to get into a home with no money down is to take out a piggyback loan. A piggyback loan is basically a home equity loan that funds your down payment. For example, if you were buying a home for $200,000 and you needed a $40,000 down payment, you would take out a piggyback loan for the $40,000 so you wouldn’t need to come up with the down payment out of your own funds.
When dealing with a no-money-down program, just make sure the program you’re dealing with is legitimate. You should never have to pay money to apply for the program so if someone asks you for cash out of your pocket, keep looking for a legitimate program.