Alaska
Home Loans - No Money Down
In this difficult economy
where stock valuations are questionable, one of the best investments
is real estate. But for many potential buyers, the problem is coming
up with a down payment to make this all-important purchase. This
should not be the case. It is possible to buy a home with nothing
down, meaning no down payment. There are several methods by which
eligible home buyers can minimize or even eliminate down payments.
They include: VA loans, Owner financing, Lease/purchase, House trading,
Job-related federal programs, and State and local
government programs.
As you know,
the hardest part in buying a home is trying to save the large down
payment required to buy a home. For the average home buyer, putting
20% down is just not possible, and in most cases, just not smart.
Even the 5% programs is out of reach for most people. Imagine if
the need for a down payment was eliminated. With our programs the
need for a down payment is eliminated. Even if you have the cash,
why would you give it up when the difference in your mortgage payment
is so minimal it just makes sense to find more useful things you
can do with your hard earned money.
Alaska
VA Loans - The method of purchasing a home with no down
payment that most people are familiar with is through the Department
of Veterans Affairs, or VA. This benefit is available to active
and retired members of the military service, veterans, POW's and
MIA's and their unmarried widows. All branches of the service including
the Coast Guard are eligible. Also members of Selected Reserves
or National Guard who have completed six years may be eligible along
with many with WW II service from the merchant marines, military
academies and others pulled into service for the war effort. Many
older veterans may recall a time when they were entitled to use
this benefit only once in their lifetime. This was changed in 1989.
Now, the only existing stipulation is that an eligible person may
use this benefit on only one house at a time. As with all VA loans,
the house must be used as a primary residence. It may not be a rental
home or second/vacation home. There is no maximum home loan amount.
Nothing-down VA foreclosures available to everyone What many people
do not know is that you do not have to be a veteran to purchase
a VA foreclosure with nothing down. VA foreclosures are available
to the general public. Some require nothing down or just a fee of
$500. Although the homes are sold from the VA, purchasers must obtain
conventional or FHA loans unless they are veterans or active military.
VA foreclosures with nothing down or $500 fees can be found among
those from banks, lending institutions and federal agencies.
Owner
Financing, Lease-Purchase - If a glut of unsold homes
develops in a market, some sellers in Alaska-- especially those
in a hurry -- become willing to assist the buyer. There may be additional
pressure on sellers of used homes when they compete with builders
in their areas who fund down payments on new homes. These sellers
may agree to lease-purchase or owner-financing plans. In both cases,
purchasers do not pay down payments to acquire the properties. Although
they allow a home buyer to purchase a home with no money down, these
programs can be good and bad for the purchaser and should be approached
with caution. As with any legal transaction, you should use a standard
legal form. Lease-purchase forms are obtainable at most major office
supply stores. Owner financing contracts are not readily available
and will have to be drafted by an attorney. In the case of lease/purchase
agreements, the seller agrees to a price that he will sell the house
for at some future date and the buyer usually pays a monthly amount
several hundred dollars more than what the home would receive as
a rental. Depending on how the agreement is written, this additional
money can be a "down payment" savings plan. A portion of the additional
money can be returned to the buyer when the house is sold and used
as a down payment. If the buyer decides not to buy the house, all
additional moneys are forfeited. If the buyer decides to complete
the transaction, he or she would secure a mortgage from a lender.
These arrangements are similar to those in owner financing except
in that case the seller is the lender.
There are two areas of concern for the buyer with these types of
purchasing options. In both cases, because the buyer is not paying
a mortgage company he does not receive any of the tax deductions
for the interest on the house payments. This may be an acceptable
trade-off for the ability to purchase a home without a down payment.
The second area of concern requires more judgment. Because the buyer
is paying the seller each month instead of a mortgage company, if
the seller were to go bankrupt or lose the home in foreclosure,
the buyer's entire investment might be lost. But on the flip side,
there have been several occasions where persons have entered into
lease-purchase agreements and then found purchasers for the homes
at amounts much greater than the selling prices contractually agreed
upon. The lessees bought the houses from the sellers and then resold
the houses for a large profit in the same day.
House
Trading, Lines of Credit - Many professional investors
acquire homes with no money down by trading one property for another.
In some cases, they trade one large property for several smaller
rental properties. Or they trade houses in different cities to acquire
a vacation or retirement home. Property trading is also a legal
way to avoid the capital gains associated with selling a property.
Another way to acquire a property with no money down may be with
a line of credit secured by the equity in another property. This
allows the homeowner to purchase another property using the accumulated
equity in a home without selling the original property.
Alaska
HUD - The Office of Housing and Urban Development (HUD)
offers special financing for first-time home buyers. This program
is based upon need and is designed to allow low-income families
to obtain their first home without a significant down payment or
closing fees. Also, many HUD foreclosure homes require no down payments.
Job-Related
Federal Programs - The federal government also has programs
to help farmers and police personnel acquire homes with nothing
down. For those with limited income who wish to live in rural areas,
the Rural Economic and Community Development Administration offers
farmers home loans with nothing down. Monthly payments may be subsidized
and the interest can be as low as 1 percent. To encourage police
to occupy homes in crime-targeted areas, special federal programs
permit police officers to purchase homes in selected areas with
nothing down. Information is available to law enforcement officers
through their places of employment.
Local
Alaska Loan Programs - Some states, counties and cities
like Alaska offer programs that can eliminate down payments. Often,
prospective home buyers must meet income requirements, hold certain
jobs, be a first-time buyer or agree to buy in a specific area.
It can take some sleuthing to find such programs. Start with your
state's housing agency. Your county or city also may have a housing
agency. With so many methods available to obtain homes with little
or no down payment, the goal of homeownership should be achievable
by almost everyone who desires it.
Alaska
Home Loans
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