Buying a Home with Zero Money Down

Purchasing a home is a big step in a person’s life. Not only do you need money ahead of the purchase, but you need to be able to pay for the mortgage. If you have been saving money and find it hard to buy a home with the pace you are moving at, consider getting a mortgage with zero money down. This is not impossible, because there are many home buyers who have bought a home with absolutely no money down. Surely, a mortgage with no down payment is not easy to get as there are a number of qualifications, but if you try, you could get it.

Before approaching a lender, it is important to get a copy of your credit report from the three credit bureaus. You should get a copy of your report to see if there are any mistakes in it. Some reports to have errors, and this could affect your chances of getting a mortgage. If the lender notices something that is not true, they would still not ask you about it, and they would simply reject your application. However, if you do get accepted, the chances are that you may have a high interest rate than usual. Since this is a zero down mortgage, your credit score should be above average.

If you have credit cards, make sure that you have the highest available limit possible. So, essentially you should pay off most of your credit card debt prior to obtaining a mortgage. A lender will not only consider your credit history and employment, but your current expenses including debt. If the bank is aware of your credit card debt, they will surely deny your mortgage application. Buying a home may be a very important goal in your life, but if you could spend some time with diminishing your debt, it could help you a great deal.

Some people have money tied up in stocks, investments and small savings accounts. It is a good idea to take out all your money and add it into one account, to show a significant amount of money. When a lender notices that you have some money available, it could play in favour. This is great because the lender knows that you have several months’ worth of mortgage payments on hand. Often times when purchasing a home, family members and friends love to help out financially. So, if you will be receiving money from people, it is best to have a written letter stating that you received the money as a gift. This way, the lender knows that you will not be paying back the money. If you will be paying back the money, it will increase the risk of the mortgage.

Depending on the state or province you reside in, there will be assistance programs and organizations that help with zero down mortgages. These plans offer you the ability to get a mortgage without putting down any money. However, remember that buying a home with no money upfront will be quite tough, so stay motivated.

Leave a Reply