Web site designed & hosted by The CABO Group, Inc © 2007 ™
Most people who rent can actually afford to buy their own homes. So what’s stopping them?
Many tenants believe that owning a home requires a big down payment. They find it difficult to save for this while continuing to pay regular monthly bills. Others are convinced they can’t qualify for a mortgage—that even if they did qualify, the payments would be too large. Almost everyone is overwhelmed by the legal and financial red tape they believe surrounds the purchase of a home. So, the easy way out is to just keep paying rent! If you see yourself in any of these situations, here are a few facts that can change your mind:
- Most people actually qualify for a 3% down mortgage but don’t realize it. Some people can actually qualify for a ZERO down payment mortgage!
- There are special government programs that help first-time homebuyers come up with a down payment.
- The average mortgage payment costs about the same as the average rent payment. For example, if you are paying rent of $650 per month, you could be paying that amount toward owning a home of your own worth $77,500. This home would probably provide more space and privacy than what you now have.
- When a survey of renters was conducted, 77 percent said that the biggest reason they don’t even check into owning their own home is their fear of feeling obligated to buy—or worse, being hounded by salespeople.
How can I qualify for a ZERO down payment mortgage?
FHA Loans
An FHA Loan is geared toward first-time homebuyers with a goal of assisting moderate to low-income families into homes of their own by providing incredibly reasonable and achievable mortgages.
This type of loan is officially considered a 3% down mortgage; however, your down payment, closing costs, and pre-paid costs can come from a gift, another secured loan, a retirement fund, an investment or 401K, or any number of approved sources apart from your pocketbook!
To qualify you need:
- 2 years of steady employment in the same field of work.
- clean credit report for 1 year, but you can have credit problems from the past.
- clean credit report for 2 years following a Chapter 7 Bankruptcy.
- clean credit report, but can even be in the process of a Chapter 13 Bankruptcy.
VA Loans
A VA Loan is available only to veterans and is geared toward providing modest housing for individuals with moderate to low incomes.
This is truly a ZERO down payment mortgage. The loan amount is 100% of the sales price of your new home, plus the VA funding fee—the loan amount is actually slightly higher than the price of the home! Closing costs and pre-paid costs can come from a gift, another secured loan, a retirement fund, an investment or 401K, or any number of approved sources. In most cases, the seller will pay closing costs and pre-paids. Now, why on earth would they do that? When the price of the home can be adjusted, it actually doesn’t cost the seller anything. For example, if you are looking at a home that is listed at $65,000 but is actually appraised to be worth $68,000, then you can purchase the home for $68,000 and the seller will pay your closing costs and pre-paids with the difference! It may sound strange, but this happens VERY frequently.
To qualify you need:
- 2 years of steady employment in the same field of work.
- clean credit report for 1 year, but you can have credit problems from the past.
- original Certificate of Eligibility.
- copy of DD–214.
How can I qualify for a 3% down payment mortgage?
FHA Loans
As stated, an FHA loan is officially considered a 3% down mortgage. If you have saved enough to cover your 3% down payment and your closing costs and pre-paids, then you are way ahead of the game. Otherwise, keep in mind that your down payment, closing costs, and pre-paid costs can come from a gift, another secured loan, a retirement fund, an investment or 401K, or any number of approved sources.
To qualify you need:
- 2 years of steady employment in the same field of work.
- clean credit report for 1 year, but you can have credit problems from the past.
- clean credit report for 2 years following a Chapter 7 Bankruptcy.
- clean credit report, but can even by in the process of a Chapter 13 Bankruptcy.
Conventional Loans
Conventional loans are geared toward people with good credit and some savings to cover down payment. There is a highly specific type of loan for first-time homebuyers called the Community Home Buyers program. This loan does require a 3% down payment of your own funds (not from a gift or a loan). As in a VA loan, the sales price can be adjusted so that the seller can (and often does!) pay your closing costs. You will, however, be required to cover your pre-paid costs with your own money.
Since this program is intended for first-time homebuyers, there is a maximum income limit.
To qualify you need:
- 2 years of steady employment in the same field of work.
- clean credit report for 1 year, with few credit problems from the past.
- 3% down payment of your own funds.
- approximately 1 to 1½% to cover pre-paid costs.
How do I figure the value of the home for which I can qualify?
Rely on your Home Loan Specialist to help you measure your financial capacity when considering a loan. A rule of thumb would be to divide your gross monthly income by your total outstanding debts (including the new payment on the home you wish to buy). Generally, you are allowed 40% of your monthly income to be used for you housing expense and all other current obligations which are outstanding (credit cards, auto loans, student loans, etc.). The best thing would be to get pre-approval for a loan—even before you begin looking for a home! Yes, you can get approval for a home loan—even before you find a home. Schedule a free, no-obligation loan evaluation session. With your “Approval Certificate” for a specific loan amount, you can shop with confidence for your dream home.
How To Buy Any Home With Zero Down Payment
The Elite Homes Group
(832) 603-4866 Office
(361) 935-8062 Cell
(832) 217-3223 Fax
Welcome To
The Elite Homes Group
Luxury Real Estate Web Site
