Discover the surprising reality of buying a home with no money down.
I receive numerous inquiries about financing and purchasing a house with no money down. There are many misconceptions surrounding real estate financing that I would like to address. One of the most common misunderstandings is whether it's possible to buy a house with no money down and have the bank cover all closing costs. Unfortunately, the answer is generally no, unless you are a veteran utilizing a VA loan.
For most individuals, financing a house without any upfront payment is not feasible. While there are limited options available, it's essential to understand how closing costs work. Let me explain the process. As a buyer, if you have arranged your down payment but lack funds for closing costs, you can request the seller to pay or contribute to these costs.
Closing costs consist of various expenses and can also be broken down into prepaid costs, such as taxes and insurance. Suppose you are interested in a $300,000 house. In that case, you can offer the seller the full amount and ask them to contribute, let's say, $10,000 towards your prepaid or closing costs.
"Many people are shocked to learn they can buy a home with no money down."
It's important to note that although the closing costs are deducted from the seller's side in the closing statement, you are essentially financing these costs. Similarly, if you are purchasing from a builder and use their approved lender, they may agree to cover your closing costs. However, it is crucial to understand that these costs are still factored into your loan.
To clarify, the misconception that you can buy a house with zero money down and have the bank pay all your closing costs is not accurate in most cases unless you qualify for a VA loan as a veteran. If you have any questions, concerns, or need assistance with your real estate matters, please don't hesitate to contact me, Richard McKinney, at ReMax Gold.
Feel free to call or email, and I'll be more than happy to help you navigate the complexities of real estate financing.