Buying A Home With No Money Down - Part 1
I don't recall mentioning it in previous articles, but the Federal Housing Administration requires 3% down towards the purchase of a home. Let's use $210,000 which is the average price of a home in Southwest Florida.
This would require a down payments of $6,300, which eliminates most young couples that do not have this kind of money saved up. This amount doesn't cover the closing costs which may involve several thousand more dollars. The government knows this and things are now in place that could enable you to get into a home if you find yourself needing more money.
Now the seller or builder can contribute up to 6% of the cost of the home towards your CLOSING COSTS. The seller / builder CANNOT contribute towards your down payment. Don't despair because there is a way around this hurdle. The government does allow you to recieve a gift (as long as it is not a loan) from a family member or a non-profit organization. It sounds weird and it is, but that is the system. Just think, you are not allowed to borrow the down payment, but you can receive it as a gift from a non-profit.
Is this really a gift? Yes, but don't be fooled into thinking the non-profit doesn't want it's money back. The days of free lunches are over. Please don't be naive enough to believe that someone, especially someone you don't know, is going to give you thousands of dollars and not worry about how to get it back. This is especially true if you already have bad credit to start with.
In my next article I'll cover how this all ties together and how to protect yourself against unscrupulous builders and greedy lenders.
Related Tags: money, home, buying, no, with, down
Chuck Lunsford is the owner and developer of EasyFloridaHomeLoans.com. He offers advice on how to get your credit in order and working for you. Visit his website and learn more about how to obtain poor credit home financing with a little education and some patience.
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