Buying a House With No Money At All! 100% Financing Options Made Simple

“NO MONEY DOWN!” “100% FINANCING!” “103% FINANCING”

Buyers love seeing and hearing those words. And why wouldn’t they? First-time buyers make up 40 percent of the home buying market. This is nearly half of all homes sold.

Consider this. There were just over seven million homes sold in 2005, not including new construction homes. This means that nearly THREE MILLION buyers bought their first home last year.

Marketing to this segment, if you are a real estate agent, is an absolute must! Of these first-time homebuyers more than four out of every 10 bought this home with no money down.

On average, first-time homebuyers put down less than 2%. Around 10 years ago, the average first-time homebuyer put down a little more than 10%.

I would say that nearly seven out of every 10 loans I do has 100% financing and it’s not just first-time homebuyers. However, most potential first-time buyers don’t even realize this option is available to them and that’s why this newsletter will focus on them.

The real estate market flourished over the last few years in large part to 100% financing for first-time homebuyers. Suddenly, buying a home is possible for nearly everyone. More first-time buyers have been able to enter the marketplace than ever before. Banks have become more liberal and lending standards have loosened. There are many, many ways to get 100% financing.

You can get 100% conventional financing with credit scores as low as 620 and a fairly recent bankruptcy.

You may be able to get a government loan with an even lower credit score. 100% financing is available for nearly every borrower. You can even buy a $2,000,000 home with no money down today. That’s two MILLION, not a typo at $200,000. Amazing, but true.

Many potential first-time homebuyers never think of buying a house because they don’t believe they have enough money for the down payment.

They’ve been told through the years that they need a 10-20% down payment to buy a home. Obviously, this simply isn’t true.

Let’s look at most of the 100% financing options:

1) 100% No Down Payment Programs.

These programs require the buyer to pay ordinary closing costs. These programs come in all varieties from 2, 3, 5, 7, and 10 year adjustable rate mortgages to 30 year fixed mortgages. All are usually available as interest-only too.

PROGRAM HIGHLIGHTS AND HOW DO I QUALIFY FOR THIS?

o 2.5%-3.5% of the total loan amount in cash required to pay closing costs and two month’s of your new loan payment in the bank for reserves.

o Stated income, stated assets and even No Doc is an option with decent credit.

o Plan on having a mid credit score of at least 660 if you cannot fully disclose your income to qualify.

o If you can fully disclose your income to qualify, your mid credit score can sometimes be as low as 580.

o These loans are designed for people who have some money for closing costs. You can qualify for this with credit scores as low as 580.

This is the most popular 100% financing option on my team.

2) 100% No Down Payment and Seller Pays Your Closing Costs.

The exact same loan program as #1, with all of the same loan program options above, but with a different twist. The seller pays all of the 2.5%-3.5% in closing costs. This is the way to go if your buyer has no money at all but fairly decent credit.

PROGRAM HIGHLIGHTS AND HOW DO I QUALIFY FOR THIS?

o The seller pays the 2.5%-3.5% of the total loan amount to pay closing costs.

o You are still usually required to show two month’s of your new loan payment in the bank for reserves.

o Stated income, stated assets and even No Doc is an option with decent credit.

o Plan on having a mid-score of at least 660 if you cannot go fully disclose your income to qualify.

o 580 mid credit score is usually the minimum required on full doc loans but plan on a much higher interest rate.

o These loans are designed for people who have no money for closing costs.

Nearly every loan program out there today allows for the seller to pay your closing costs. This means no money out of your pocket.

If you don’t have the necessary reserves or you don’t have the ability to get them, it is not a big deal, and you should still be able to get the loan. However, it’s important to notify your preferred lender of this immediately as this could change the availability of the loan program and likely your interest rate.

3) 103% Loan With No Down Payment, Little or No Closing Costs.

Maybe your seller refuses to pay for closing costs and your buyer has no money to close. Then 103% loan programs may be the way to go. This means the lender finances the closing costs as well. The requirements on this program are stricter and the options fewer.

PROGRAM HIGHLIGHTS AND HOW DO I QUALIFY FOR THIS?

o The lender pays the 2.5%-3.5% of the total loan amount to pay closing costs and ties this into your loan.

o You still may be required to show two month’s of your new loan payment in the bank for reserves.

o Stated income, stated assets and even No Doc is NOT usually an option regardless of your credit.

o Plan on having a mid-score of at least 620.

o These loans are designed for people who have no money for closing costs and the seller refuses to chip in.

The interest rates on these programs are higher and the program selection is more limited. If possible, it’s a better move to go for #1 or #2.

4) VA Loans

If you are a Veteran, VA loans require no money down and the seller can pay your closing costs. The rates are very good and the credit requirements are not very high.

PROGRAM HIGHLIGHTS AND HOW DO I QUALIFY FOR THIS?

o Must be a veteran in active duty, or honorably discharged.

o The seller usually pays the 2.5%-3.5% of the total loan amount to pay closing costs but the Veteran can pay too.

o Must fully disclose your income to qualify. You cannot go stated income or No Doc.

o You will not be required to show two month’s of your new loan payment in the bank for reserves.

o Stated income, stated assets and even No Doc is NOT an option regardless of your credit.

o Plan on having mid-score of at least 560 – 580 although there is no formal guideline on this.

o These loans are designed for Veterans only.

5) FHA Loans

This isn’t really a “No Money Down” option, however many first-time homebuyers have found that the FHA loan is one of the best alternatives when they don’t have much money to put down.

With an FHA loan, you could put down as little as 3%. FHA loans are easier to qualify for. If your credit is less-than-perfect, the rates on an FHA loan are usually far better than the sub-prime alternative that you may be facing. For example, if you have a 580 mid-credit score, your options may be FHA or a sub-prime loan. FHA would probably be cheaper for you.

Now, 3% may seem like a lot to come up with, but many people find that when they put their minds to it, it’s not that difficult. FHA allows this 3% to be gifted to you by a family member, employer, or even a charitable organization.

Why Young Adults Need to Learn About Personal Finance in School

Children are sent to school for the purpose of learning and developing talents and skills that will prepare them for future life in the real world. While it is true that they are taught grammar, math, Biology, languages, and skills like baking and other practical arts, they are usually found lacking in the subject of personal finance.

To manage your own personal finances is basic and essential when you want to become self-reliant and when you want to put your life in order and start a home of your own. To have the fundamental understanding of personal finance means that you are better prepared to face life ahead of you. It is very common, for instance, how young couples get on with their lives together with high hopes for the future, only to be met with disappointment and soon find themselves entangled in debt. This situation is just a result of not learning the essentials of personal finance.

Without gaining these basic skills soon enough, they may find themselves sinking deeper into debt. Then they start to lose whatever assets they had acquired, their homes, and possibly threaten their relationships. Not knowing what would happen if you spend more than you earn, or why is it important to save even just a small portion of your earning, or why is it necessary to be cautious when using credit, is a sure reason for falling into the mire of debt. If you try to handle your own household without basic learning, the future would be bleak and failure is not far ahead.

This is the reason why young people in high school should be taught these primary tenets. They need to acquire these skills early on in order to be ready when they are on their own, whether in going to the university, in having a job, or even living at home.

Now, therefore, is the perfect time for them to learn how to live within a budget, to not spend more than what they earn, and to save, before they face real life and have regrets later on. The worst thing they can do for themselves to build up a ton of debt, have bad credit and not be able to make those important life purchases down the road, like a home or a car.

The Concept Of Finance In Different Contexts

The word finance has the sane connotations wherever it is used. It means liquid funds or cash reserves to be utilized for various purposes. For a very poor man, finance has only one meaning and that is to be able to generate enough to get him two meals a day. For a common man, it means to be able to pay off all his loan installments, his kids school fees, and his and his wife’s requirements depending upon their social circle.

For a small shop owner, the word finance means the funds he needs for his next purchase for the big occasions like Christmas and New Year. To an industrialist, the same word means his ability to complete the ongoing projects and to sign off new contracts with other companies. For a country, finance means reserves to be spent on the development of infrastructure, imports, healthcare, research and development agriculture and all other essential sectors. But in all situations, the essence of the word remains the same. It’s only the degree and magnitude that change.

Finance in itself is a big subject that is taught in business schools according to scientific rules. These finance schools produce youngsters trained in the principles of finance that go on to hold the reigns in big multinational companies. People having knowledge of sound principles of finance make the financial policies of the companies and they are accountable if any financial irregularities are found in the balance sheets or the accounts of any company.

Banks and other financial institutions are the backbone of any economy and they serve the financial needs of the people by making available loans and other mortgages to let them carry on with their projects like buying a car, electronics, home or any other thing. Banks even provide finances to let a person complete his higher education.

The Best Car Insurance Rates

If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.

In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.

Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.

Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.

Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.

Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.

In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.