“No money for down payment? No problem!”
Recession on the high and prices of all real estate properties going down! This is perhaps just the irony of the present days that is preventing us from making the best of the times. Though we all know how good a time it is right now to purchase real estate since the market is on a low and the prices are quite down, yet there is a general cash crunch that holds us back from buying those golden properties.
Yet now we even have a solution for this one problem. There are today many ways you can enter the real estate business even when you have no money with you to make the down payment. Unlike what others might say this is quite easier than ever before. Let us check out the ways you can get your piece of land without enough money to make a down payment:
- 1.Borrow money. This is like the simplest thing to do. Find a lender who is ready to pawn some money to you for low rates or find a home equity for yourself. You could even check out for similar lines of credit for financing your purchase decision.
- 2.Lease with an option to buy. You can actually rent the property from the seller under this method by promising to pay a negotiated sum at equal intervals as put down in the lease agreement. You can then buy the property from the seller at the pre-negotiated price.
- 3.Assuming the existing mortgage. Under this method you can use the seller’s existing financing using a ‘subject to’ contract where you can buy the seller’s mortgage and receive title to the property as well. In this case you can win hugely if the seller’s mortgage charges you a very low rate of interest.
- 4.Seller Financing. What happens here is that you negotiate better terms with the seller since you do not have means to pay the down payment. The seller might either pay that down payment on your behalf or accept the deal with no down payment for a higher monthly payment agreement in future. This can be a good deal especially when the seller is in a hurry to dispose the property.
- 5.Negotiating down payment. You can either ask for splitting up the down payment into installments or ask permission for a balloon payment at say the end of the year terms.
- 6.Swapping Personal Property. There could be many things you could exchange for a down payment – especially things that you do not use any more like your unused garage or an antique furniture etc.
- 7.Barter exchange with your personal skills. If the seller is ready to accept your services, you can spare some part of your personal skills in exchange for the down payment. For example, if you are an accountant, you can help the seller with his accounts for a while etc.
These are just some of the ways you can escape from making down payments. You could also bring in other partners or combine mortgages or use any other methods that are acceptable to the seller as well.
Related Article: What is a Hard Money Real Estate Loan?
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