badhonzoo9

· 30 Nov 2021

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How to Buy a House With NO Down Payment!

For a home buyer in today's market it can be difficult. Fear of a recession has caused everyone to tighten his belt. Banks make it difficult to borrow money, employers do not let us overtime, the cost of daily necessities rises. People cannot save a lot of money with all these features that are accumulated in them. So what does a homeowner do when he or she needs to come up with a lower payment? Usually a bank or other lender needs at least 10% usually 20% of the purchase price as a down payment. So for a purchase of $ 100,000 you, the buyer, need to come up with $ 10,000 or about $ 20,000. What if you don't have it? This is something to think about before you go out and look for a house to buy.

One possible solution is to negotiate the rental option. This may have different names in different places but the concept is the same. You and the seller agree that you will rent the house to the seller for a specified period of time such as 2 or 3 years. The amount of the rental rent is equal to or greater than what you would pay for rental housing payments. At the end of that time you have the option to buy a house at a predetermined price, some of your rental payments are used for the purchase. If not, you can opt out or with the seller's permission to stay for another year or longer.

This applies to a seller who has no immediate need to leave the house. Either he is paid or he can easily make mortgage payments on the rental payments the buyer makes to him. This method allows the buyer to work on the purchase of the house without having to pay a lot of money.

At the end of 2 or 3 years, the consumer can go to a lender who has a history of repayment and negotiate a low or no repayment loan, based on the loan amount. An interest rate loan or LTV is something that lenders want to see before borrowing any. Basically LTV is a real estate market divided by the number of loans.

Therefore, in our example of $ 100,000 with a normal payment of 20% the lender will be making an 80% debt. If the market value of the house is $ 100,000 and the loan is $ 80,000 LTV is 80% (80,000 / 100,000 = 0.8 x 100 = 80%). Now that the buyer is paying for 2 years, the price of the house is reduced by a certain percentage of payments, maybe 50% (or more, this is negotiable, but the figures are 50% easier). So if the buyer has been making payments of $ 1000 a month (this may be a little higher but also, the calculations are simple), $ 500 a month is deducted from the purchase price, so 500 x 24 months = 12,000 dollars. The original price of $ 100,000 has been reduced to $ 88,000. After 3 years, 100,000 - 18,000 = 82,000 dollars are now very close to 80% LTV, so the lender can borrow $ 80,000 with a $ 100,000 house and the buyer only needs $ 2,000 as a down payment. It is possible that the lender can consider the payment history and not make the buyer have a minimum payment of $ 2,000, it has never been painful to ask.

All of these monthly payment numbers and percentages are negotiated between buyer and seller and need to be agreed in advance. All of this requires writing in a contract that everyone understands and agrees to before any money can change hands, to prevent disagreements later.

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