Can I Buy a Home with
No Money Down?
“Can I buy a home with no money down?”
is a question that is flashed up on the screen during
a number of current infomercials. These are the same
infomercials with people discussing how they were down
on their luck, but they now make six (or seven) figures
a year through a very special real estate sales technique
developed by a very special real estate guru. These
extended ads go on to explain how it is possible to
buy homes for no money down and it is possible to turn
a very nice profit on the property. Whether or not all
of the claims made in these infomercials are valid remains
to be seen. However, it is possible for people who want
to buy a home to do so without putting money down. This
process usually requires a person to have excellent
credit, so it is not something that everyone can benefit
from.
The Upside and Downside of Buying a Home with No
Money Down
Not having to put anything down on a home allows a
person to hold onto money that can then be used for
other investments or living expenses. Also, people who
do not put money down generally enjoy maximum homeowner
tax breaks. This is actually true for a person who is
buying a house or for a person who is refinancing a
loan on a current property. There are some negative
aspects to purchasing a house without putting any money
down. The two biggest problems for most people are high
interest rates and private mortgage insurance (PMI).
Generally, a person has to put at least 20 percent down
on a home to avoid paying what can be a very high price
for PMI.
More and More People Are Paying PMI
So what's one of the main results of all these new
no money down loans? Basically, more and more Americans
are finding themselves dealing with the cost of PMI.
Does this really outweigh the cons of paying a hefty
down payment? For people who simply cannot afford a
down payment of 20 percent or more, yet wish to fulfill
the dream of home ownership, coping with PMI is a must.
Effectively handling PMI payments and leveraging a new
property into a suitable investment can be done with
some sound advice. Finding the right no money down lender
is the first step in the process.
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