The financial climate across the country is relatively poor overall. Therefore, it is a wise buyer that can purchase a home with literally no money out of pocket. Most people don’t realize that they can purchase a home with all fees included in their mortgage, but the opportunities do exist.
Available 100% Mortgage Loans
One hundred percent home financing can be obtained by two main groups of citizens. The first group
consists of military veterans that can receive 100 percent financing with zero-down and no mortgage insurance from the Veterans Administration as long as they qualify – which can be quite difficult. A funding fee is required, but it can be rolled into the mortgage loan. Funding fees are dependent on such criteria as whether it is a first-time or subsequent loan and if the applicant served in the National Guard, Reserves, or regular military.
The 100 percent financing option available to non-military citizens is the U.S. Department of Agriculture mortgage guarantee program for rural development. This program offers 100 percent financing on select areas of the country. Most approved properties are in rural areas, but many also exist in suburban areas where development is being encouraged. As with VA loans, USDA rural loans do not require downpayments and nominal mortgage insurance fees can be rolled into the loan.
How to Handle Closing Costs
Even after a loan has been preapproved for the amount of the home, there is still the issue of paying closing costs to contend with. Various fees can make up the total of closing costs such as property taxes which have been pro-rated, loan interest, discount points, fees for loan origination and other fees required upfront. Although closing costs can vary according to purchase price, property location and other criteria, they normally consist of several thousand dollars payable at the close of the sale.
The best strategy for eliminating closing cost expenses is to get the seller to agree to pay them. This is not as easy as it may seem because the seller is looking at making X number of net dollars on the deal and paying, for example, $5,000 off the top means he receives that much less. The way in which to handle this situation where both parties are satisfied is to first agree with the seller on a closing price and then ask him to raise the price by the difference while agreeing to give you the credit. This method not only eliminates the need for you or the buyer to pay out of pocket for the closing costs, but it also pleases lenders (they make more money over the life of the loan) as well as neighborhood homeowners and realtors (the value of the property is registered higher).
As you can see, with a little research and a bit of tact, you can own your own home with no money out of pocket by obtaining 100 percent financed mortgage loans and getting the seller to pay closing costs. To find out more simply give us a call at (843) 444-LOAN (5626), or go to our secure loan application at http://acmg.info/loan-application/.