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Zan Molko
ABR, ASP, ASA, Real Estate Broker

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Another option to buy a home with Zero down payment!

 About ten years ago I met a young man, Tim, who wanted to buy his first home. He had a great, well paying job, but after paying off his student loans he had almost no cash for a down payment and had not been working long enough to have a RSP. We met for a coffee and after a lengthy conversation came up with a plan for him to buy his first home with no money down.

He was fortunate enough to have a Grandmother, who owned a home free and clear worth about $300,000. We approached his grandmother with a win-win plan for her to put a $50,000 Mortgage on her home for which he made the payments to her, at a fair interest rate. This also helped her, as it provided additional income to her somewhat limited fixed pension. (We call this a Granny Mortgage)

He then purchased a home for just under $200,000, got a conventional mortgage for $150,000 and used the $50,000 as the down payment.

With his excellent credit rating and good income, he was easily able to qualify for and was also able to carry the payments for both mortgages. The net result is he bought a home for $200,000 including closing costs, without having any down payment.

The rest of the story is even better.

He is a very handy person, and invested about $24,000 in the home to renovate it and sold it two years later for $314,000. After paying back his grandmother the $50,000 he walked away with a net equity gain of almost $77,000, TAX FREE. By the way, don't forget today is tax deadline! He then used that money as the down payment on his next property.

Well, not everyone is fortunate enough to have a family member that can help them out in such a manner. No worries!! There are other options available to buy a home or condo with little or no down payment. There are just two important requirements, You have to have the income to support the purchase price and you need to have an excellent record of paying your bills on time. (A Good credit rating) Follow This to review how you could qualify.

If you want to have the same kind of conversation that I had with Tim 10 years ago, just Click Here.

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