Now, you know that even if you resort to no money down concept, you have to make the down payment, but, with the money obtained from other sources. What are the other sources? Here are some tips and guidelines regarding the possible sources, from which you may obtain the money for down payment.
- One of the easiest way is to borrow the required amount from your friends or relatives. You can pay them back in installments.
- Another option for buying real estate with no money down is seller financing. The seller may agree to make the down payment, so as to sell the property as soon as possible. It may also happen that some sellers agree for a down payment, which is paid at slightly higher monthly payments.
- You may also take over the seller's existing financing as part of the purchase price for buying commercial property with no money down. In other words, you can buy the property in return of making the mortgage payments of the seller, regarding the concerned property. This will be beneficial for the buyer, if the interest rate of that loan is lower. However, make sure that you go through the documents of the existing loan, as some of the loans have a due on sale clause, which inhibits the new buyer of the said property from taking over the mortgage. However, the lending institution may not exercise this clause, even if, it is incorporated.
- There are some rental properties that are attached with an option to buy. In such cases, a lease option to buy home or option agreement is made, in which the owner of the property and the lessor agrees for a specific sum to be paid at regular intervals and the latter is allowed to use the property. The lessor can purchase the property within the lease period for a predetermined price. It has been observed that a partial or total rent will be adjusted towards the purchase price.
- In some cases, personal property or professional services of the buyer can be used as a substitute for down payment.
- Another option for buying real estate with no money down is to get a partner, who can dole out money for the down payment.
- You may borrow against insurance policies or other property. You may also apply for down payment assistance for first time buyers.
- Negotiate with the lending institution for a 100% financing. Otherwise, you may also opt for a second home mortgage loan, that can be used for down payment or may avail of a mortgage loans with no down payment.