Can I Buy A House With No Money Down?
Buying a house is a dream for most people. It is more than just the status of owning your own home; it provides a feeling of security for retirement. It is also the best place to escape from the modern stressful world and relax.
Know The Buying Process
Before you can determine the best way for you to buy a house you need to be certain that you understand the buying process.
Once you commit to purchasing a house you need to have the funds ready and to follow through on the purchase commitment. It doesn’t matter if you’re using a reputable auction agency such as cscerriauctions.com.au or the more traditional real estate agent approach.
You need finance in place and to know what you are actually looking for.
Buying With No Money Down
You may be surprised to discover that you can actually purchase a house with no money down. You’ll need to be approved for a 100% loan but it is important to be aware of all the potential pitfalls of buying a home this way.
In many cases to qualify for a 100% loan you’ll need to have the backing of a guarantor. It is more common to get a loan for 95% of the value of your home.
The Issues With 100% Loans
It is essential that you are aware of all the implications involved in getting a house with no money down; before you sign on the dotted line.
- Your Credit Rating
This needs to be perfect. You simply won’t get considered if you have any marks on your credit record. Check your file with Veda Australia or Dun&Bradstreet before you apply.
You don’t just need a steady job. You need to have been working for the same firm for at least three years. Ideally you should be working in a career that provides you with a low risk of losing your job. Doctors, lawyers and accountants are good choices.
- Standard property
The mortgage company needs to be able to assess the value of your home accurately. This means you need to be buying a standard property; not trying to build your own.
It is also better if it is located in a larger city or coastal resort as it is easier for the mortgage company to recoup the money if necessary.
- High Interest rates
One factor to consider is that the 100% loan is riskier for the lender. This means they will charge you a higher rate of interest. You should calculate whether this really makes the house purchase worthwhile or not; you could end up paying considerably more than you borrowed.
- Fees On Top
Don’t forget that real estate agent fees and legal costs are all on top of the house price and not something that your 100% loan will cover.
You need to have some funds available to cover these costs; you won’t be able to get additional finance while buying your home.