It might seem like a crazy concept, but you can actually purchase property with no money down. There are several ways this can happen. Let’s look at a few of them.
A seller-financed property is one way to buy a home with no money down. In these cases, you are often assuming a loan. So long as you can make the monthly payments, you can get in without any down payment. The loan is transferred to you, and it carries on to the original termination date.
There is also a rent-to-own or lease-to-own option you can pursue with an existing owner. The terms will specify a certain amount of time during which you have to faithfully make payments. At the end of that term, you can take over the mortgage payments and work towards owning the house.
Some sellers who are looking to get out of a distressed property or bad loan may be willing to overlook your down. They do this just to try to recover anything from their original purchase and get a deal done. Sometimes this operates as an option plan. If you end up not buying the property, the seller has the right to keep that money. Other times it is the seller forgiving the down payment in exchange for you assuming their debts.
Barter is another option. Are you looking to sell an RV and settle down into a house? You might be able to exchange the RV for the down payment. This works for other items, too, like a boat or a car.
Do you have some home repair skills? You might be able to do some work on the house for the current owner. That sweat equity can be used instead of a down payment. It’s a similar principle to how Habitat for Humanity works. Each homeowner is expected to put in a certain amount of time actually building his or her own house.
You might be able to borrow the down payment from relatives. This isn’t quite the same as absolutely no money down, since many relatives will want the investment back. But, it means you can purchase a home even if your savings account has more moths than money.
This is similar to a joint venture. A joint venture works when you are looking to buy property as investments. If you have a business partner willing to put up the down payment in exchange for a share of future profits, you win too. It helps you build your investment portfolio without having to have any upfront money.
Some 401k retirement plans allow you to take a loan against yourself and buy a home. Check with the plan administrator to see if this is an option you have.
Talk to your lending institution to see if they have any no money down plans they participate in. The USDA is always interested in helping farmers, and they sometimes finance no money down loans.
As you can see, there are several options available to help you buy a home with no money down. Talk to your bank or financial adviser to see which is going to be the best option for you.