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Learn how to Buy a Home with a No Money Down Mortgage

Author: RobKosberg
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People are under the confused notion that they need thousands of dollars for a down payment on their dream home because of the problems in the mortgage industry. That is absolutely false! A HUD approved government program allows any buyer to take advantage of the amazing buyers market we are in and buy their dream home with No Money Down.

The following is a process to step you through the bascis of buying with absolutely no money out of pocket. This government program is approved by HUD and completely RESPA compliant.

Your first step is to get in contact with an Mortgage Planner that specializes in FHA and works with a DPA. DPA is short for down payment assistance program. One of the longest running and most used DPA's is the Nehemiah program. Nehemiah has assisted over 275,000 buyers and sellers since 1998. They are government approved and HUD compliant.

Now you will need to get pre-qualifed for a DPA with a certified DPA specialist. Most people are concerned about credit with a no money down program but credit does not need to be perfect. Credit scores can be as low as 550 to qualify. FHA is primarily concerned with the borrowers ability to repay. So they will be focused on the income verification and will look at your last 2 years of income verification. Any owner occupant is eligible for this program.

Now it's time to start looking for your home. FHA limits have increased recently so you may be surprised how high you can go. In some areas (Los Angeles) FHA limits go up to $729,000. In most other areas the limit is $423,000. With values down all over the country this is an ideal time to buy.

Now your realtor must begin the negotiations with the seller. The sellers assistance is vital. They must participate in the DPA by funding the closing costs to you and down payment to Nehemiah (or whatever DPA you choose). The seller will be required to contribute 7-10% to you through Nehemiah and closing costs. Expect to offer closer to the list price of the property since you are requesting a large contribution. The seller is generally concerned with how much they are walking away with so the contribution is not important to them.

Apply for a mortgage with a Certified Nehemiah specialist. Choosing the right specialist is an important step due to the complexity of Nehemiah and the FHA. An inexperienced "Broker" can cost you time and money and perhaps even cause you to lose your contract.

The requirements for qualifying are fairly simple. You will need your last two years of tax returns or W-2's. You will need to have your most recent paystub and 2-3 months of bank statements. If you are renting right now you will also need the last years worth of cancelled checks or a letter from the property manager.

Go to closing and be AMAZED! The closing is not a time to fret and be worried. The closing is the finsh line - the CELEBRATION! If your Mortgage Consultant has done their job then all questions will have been answered. I've seen individuals walk away from closing with a 5.75% 30 year fixed rate mortgage, a few hundred dollars back to them and a new HOME! You can do it too. Don't let the greatest buying opportunity of our generation go by.

About the Author

Before you go any further, be sure that you get the complete story and check out Rob Kosbergs' Detailed FREE Guide on Buying with a Zero Down Mortgage or for up to date Mortgage info visit his Mortgage Blog