| Buying a house on installment terms or through | | | | purchase is usually short, about 3 years max. Not |
| mortgage always poses a problem of coming up with | | | | exercising the option will nullify the lease-purchase |
| a down payment. To ease the burden of down | | | | option contract. The buyer loses the option fee and |
| payment some sellers offer what could be termed as | | | | rent paid which normally forms part of the equity. See |
| split-down payment or staggered-down payment over | | | | if it is possible to keep the property price as is, until the |
| short period of time. They offer this scheme especially | | | | time you exercise your option to purchase. This will |
| if the buyer has expected source of funds that should | | | | save a lot of money while your lease payments are |
| cover the down payment within a short period. The | | | | also like savings on the down payment. |
| problem of down payment arises when a buyer can | | | | 3. In-House or owner financing is another to look at |
| afford the monthly mortgage but has no way to raise | | | | when buying a house with no money down. In-house |
| the buyer's equity required by the mortgage company. | | | | financing is usually done by owner-developer-marketer |
| There are some ways to go around the equity | | | | of real estate. This means they own the land, |
| required and here are three of them: | | | | developed it and are marketing it on their own, offering |
| 1. The Seller's selling price is way below current market | | | | installment purchase in-house. Many of the owner |
| value or appraised market value. Mortgage or financing | | | | developer/marketer outfits are flexible in terms of sale |
| companies usually give out home loans 100% of | | | | especially with no money down. There are those who |
| market or assessed value. If the seller's price is say | | | | incorporate the down payment in the first few months |
| 80% of the 100% loan amount, then you have 20% | | | | or years of mortgage payment, depending on the |
| available as equity. The seller must agree that the loan | | | | capacity of the buyer. After the down payment has |
| amount is the selling price and acknowledges receipt | | | | been satisfied after the months or years as stipulated, |
| of the buyer's equity. In that way, there is practically no | | | | the monthly mortgage payment returns to regular. In its |
| money down coming from you. It would look like | | | | truest sense, there was a down payment on the |
| you've bargained your way out of the down payment! | | | | purchase. What the scheme here offers is relief from |
| Find out also the possibility of making the 20% as a | | | | the problem of coming up with outright cash for down |
| discount given by the seller to do away with down | | | | payment. |
| payment. That would be more transparent in the eyes | | | | There are some other ways for no money down in |
| of the mortgage company. | | | | house purchase. A few would really not require down |
| 2. Rent-to-Own purchase is becoming a popular way | | | | payment but has to be negotiated in some way or |
| to buy a house with no money down. This one is quite | | | | another. Others yet are actually offering deferred or |
| tricky and reading the lease-purchase contract very | | | | staggered down payment that will not require outright |
| well is a must. Understand the clauses very well under | | | | cash down payment. Those that allow second |
| terms and conditions. A minimal option fee 5% or less | | | | mortgage could be for down payment. A buyer should |
| is frequently required to secure the lease-purchase | | | | take a good look on this because mortgage payments |
| agreement. The right to exercise the option to | | | | could be beyond their capacity. |