How to buy a house without money
So, you have finally found your dream home in Malaysia. You can already imagine how your life will be like living there. But, there is one problem and a big one at that. You don’t have enough cash. Now, don’t let this stop you from buying and living in the house of your dreams. Below are some tips on how to buy a house without money:
Borrow the Money
There is no doubt that the easiest, simplest, and fastest way for you to buy a house even without money is for you to borrow the down payment first. For this, you can try searching for a lender who offers a lower interest rate. You can also use home equity as well as other forms of line of credit loan that will still offer the same tax benefits as those of a normal mortgage.
One more thing you can do is to borrow from the real estate broker. You can arrange borrowing the broker’s commission in just a short span of time then allot these funds for your down payment.
Combine the Mortgages
In case you already have a property under your ownership, you can try combining mortgages so that you can give cash to the seller at closing with no need for you to use your own money. You can also try suggesting for the seller to put a second mortgage over the first one and keep the money as you, the buyer, assume the two loans.
Exchange an Old Property with a New One
When you already have your own property, you can try exchanging this for another property. You can either exchange this property with the buyer or you use this in combination with some cash so that you can get your dream property.
Trade Your Skills
Buyers can provide skills instead of money. Accountants, plumbers, mechanics, doctors, lawyers, contractors, and others all have skills they can trade that will come in handy in place of a down payment in cash.
Lease with an Option to Buy
There are many buyers who don’t realize that they can rent a property from the seller with the option to buy. Based on the terms of the option or lease agreement, the seller and the buyer will negotiate an amount that will be paid at regular intervals for the property’s use.
This kind of agreement will allow the lessor to buy the property at the set price during the lease’s term. Most of the time, a part or often all of the payments for the rent is going to be credited to the purchase price.
Discuss the Down Payment
Together with all the things stated in the real estate contract, it is almost always possible to negotiate the down payment’s amount as well as who will be paying it. The buyer may opt for the seller to pay the down payment or offer credit at the closing for the down payment of the buyer. The buyer can also request paying the down payment in installments. This can be in the form of installments paid every month or as balloon payment when the year ends.
Offer Better Terms or a Higher Price
There are also buyers who are willing and ready to accept an increased price for the property despite being in installments in exchange of receiving a down payment.
Do Your Research
Some buyers might be more suitable to accept no down payment offers on a particular property compared to others. The seller might be more than willing to negotiate if the property is being advertised as must-sell or it has been sitting on the market for some time already. Aside from this, just like any other forms of real estate investments, make sure that you research about the property first before you finalize the sale.
Consider Seller Financing
One more easy way of buying a house even with no money is to seek the seller’s assistance. For instance, the seller might decline the payment in lieu of higher payments every month. The seller may also choose to pay for the down payment of the buyer just so the property can get sold off faster.
Swap Your Personal Property
Something that you own can be used as a substitute for cash so that you can close a deal with no money down. For instance, if the seller has plans to retire, you might have an unused motor home that might be more valuable compared to a cash down payment. Appliances, furniture, cars, campers, and boats are all considered as acceptable replacements for cash down payment.
Look for a Partner
Searching for other cash buyers is one more feasible way to buy a property even without any money down. But, this one option may get a bit messy once other people are involved in the deal. For this process to simpler on your part, you can try organizing the deal on smaller scale through bringing in just one person or two more at the most.
In exchange for the financing they will offer, you could promise them to take on the work of putting together and completing the deal as well as supervising the real estate investment. Also, you can try working out the same deal with the seller of the property.
Assume the Debts of the Seller
If the seller of your dream home needs cash for paying off other existing debts, as the buyer, you can offer assuming these debts instead of giving a down payment for the property.
Take Over the Current Mortgage
There are purchasers who can take advantage of the “subject to” contract wherein the buyer will use the existing financing of the seller for a portion of the purchase price. The use of the existing finance of the seller is particularly successful if the existing loan has low interest rate.
Here, the buyer will receive the property’s title in exchange of making payments on the mortgage of the seller. However, if you ever choose to go down this route, it is imperative that you research more about the current loan. This is because there are several loans that come with a due-on-sale clause and this will prohibit the new buyer from taking over the mortgage.
You see, nothing should stop you from becoming the owner of that house that you have been eyeing and dreaming off for the longest time. Even if you might not have available cash at the moment, there are still other options that you can consider. Choose any of the choices above and pick the right one that best suits your situation and your personal preferences.
[Image source: Man hand photo created by frimufilms]