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How do you buy a house with no money down?

A:

Quick Answer

Buying a house with no money down entails collecting all financial documents, finding a cosigner and applying for an FHA loan, according to SFGate. This is possible for people who have bad credit or those who have a history of financial hardship.

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Financial statements show lenders that applicants can handle a mortgage despite bad credit, notes SFGate. These documents should include W-2 forms, bank statements and pay stubs. Applicants need to demonstrate that they make a consistent form of income. Include any stocks or investments as well. Disclosing any debts is necessary, such as student loan payments.

Finding a cosigner is a good way to get access to a home loan, explains SFGate. A cosigner is the person who is borrowing with the mortgage applicant. The cosigner may also be able to negotiate better conditions in the loan.

An FHA loan has the backing of the federal government, claims SFGate. FHA loans are less stringent than standard mortgages, and applicants with histories of foreclosure and bankruptcies may qualify. Even though FHA loans require a small down payment, the money can be obtained through charities or relatives.

People who have high credit ratings can qualify for a zero down payment mortgage, otherwise known as an 80/20 mortgage, according to SFGate. Applicants with good credit ratings who pay bills on time and have sufficient income are other likely candidates for this type of mortgage.

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