Pros and Cons of Buying a House with Little or No Money Down
Today, most families cannot buy their own house because their family income is just enough to supply their everyday needs. Because of the economic downturn people can no longer afford the expensive price of home plus the other expenses that a home buyer may incur. That is the reason why people go for other options and one of which is purchasing a house with little or no money down. Through these buying method people are able to acquire a house without paying so a lot of money for down payment. Nevertheless, you must analyze first the downsides as well as the advantages of this home buying practice before you choose whether you want to buy a house with little or no money down.
One of the drawbacks of purchasing a house with little or no down payment is the possibility that if the time comes that you can no longer afford the mortgage you may end up losing the house. And that problem may arise once you leave your job, get divorced, become disabled or got serious ailment and have to pay for your medical bills. And when you get to into that situation when you can no longer afford the mortgage payment it could lead to the foreclosure of your property.
Absolutely, if you lose your home, you are out of money even if you did not spend any money for down payment. Your credit record might also suffer due to the expenses that you have incurred for moving in and paying for closing costs. Moreover, you may also acquire personal liability on the mortgage and note. Hence, purchasing a home with little or no money down could put you to a big financial misfortune.
One more prevailing argument against low or no down payment is that the lower amount you give for down payment, the higher your monthly mortgage payments will be and lengthier it will take you to own the property. In addition, if you could make a 20% to 25% down payment, you might receive better terms or lower interest rate. These are important considerations to think on before buying a house with little or no savings. To succeed in purchasing a house with little savings you must have a secure means of earnings or a stable job.
On the contrary, there are also reasons why we should go for this option. Primarily, the argument is that the difference between being well-off and being underprivileged in our society today depends whether an individual own a home or not. For many years, moving to better house is a sign of wealth and success for every family. But these days many people, rather than continuing to move up the ladder of housing progress, they got stuck in economic disparity and fail to acquire their own home. The reason is that fewer people today can afford to buy real estate property and the worst hindrance they often face is the lack of savings to pay for the down payment and closing costs.
One of the drawbacks of purchasing a house with little or no down payment is the possibility that if the time comes that you can no longer afford the mortgage you may end up losing the house. And that problem may arise once you leave your job, get divorced, become disabled or got serious ailment and have to pay for your medical bills. And when you get to into that situation when you can no longer afford the mortgage payment it could lead to the foreclosure of your property.
Absolutely, if you lose your home, you are out of money even if you did not spend any money for down payment. Your credit record might also suffer due to the expenses that you have incurred for moving in and paying for closing costs. Moreover, you may also acquire personal liability on the mortgage and note. Hence, purchasing a home with little or no money down could put you to a big financial misfortune.
One more prevailing argument against low or no down payment is that the lower amount you give for down payment, the higher your monthly mortgage payments will be and lengthier it will take you to own the property. In addition, if you could make a 20% to 25% down payment, you might receive better terms or lower interest rate. These are important considerations to think on before buying a house with little or no savings. To succeed in purchasing a house with little savings you must have a secure means of earnings or a stable job.
On the contrary, there are also reasons why we should go for this option. Primarily, the argument is that the difference between being well-off and being underprivileged in our society today depends whether an individual own a home or not. For many years, moving to better house is a sign of wealth and success for every family. But these days many people, rather than continuing to move up the ladder of housing progress, they got stuck in economic disparity and fail to acquire their own home. The reason is that fewer people today can afford to buy real estate property and the worst hindrance they often face is the lack of savings to pay for the down payment and closing costs.