Can you really get houses with no down payment?

genchan · #1 (**permalink**) 02-22-2005, 12:52 PM

I see all these infomercials and advertisements that say you can buy a house with no down payment and get rich in the process. Are these legit or scams? And if they are scams, why are they allowed on TV?

gakline · #2 (**permalink**) 02-22-2005, 03:12 PM

You are able to get the no down payment part. What happens is you take out two loans in an 80/20 split. Your normal mortgage is for 80% of the purchase price, and then you have a separate loan for the 20%. Doing it this way makes it look like you have a 20% down payment. Usually the 20% is a shorter loan, such as 15 years. By doing the 80/20 loan you also avoid paying private mortgage insurance, PMI.

As for getting rich, I haven't heard that part. But, I would imagine that they encourage you to take a larger loan and then give you that money.

terry1156 · #3 (**permalink**) 02-23-2005, 10:05 AM

You can get the house with no down payment like gakline said, but making the money on the houses like all those advertisements say is very misleading. I would never pay for one of those programs.

jacquelynrose · #4 (**permalink**) 02-23-2005, 11:17 PM

I actually work for one of those "programs"

and I participate in a couple of Real Estate Investing Boards and not all of them are scams. Just do your homework first. I know someone who also told me they were able to get there house using the program.

JMO,

Jacquelyn

jhd815 · #5 (**permalink**) 02-28-2005, 07:24 PM

Not all are scams as Jacquelyn has said, and the only way you are going to get rich is to put a lot of time and effort into any legitimate program.

Do a google search and I'm sure you'll find some good sites with opinions and comments about what programs work and which are just scams.

A lot of the so called experts you see in the informercials are multi-millionaires but the person who is assured of making the most money with these programs is the person selling the information!

amomof4 · #6 (**permalink**) 02-28-2005, 11:23 PM

Most of it is not true. They just want your money. And in this market, there is no way you are going to buy with no money. Too many other buyers.

I did buy my first house with almost no money. We had to put $5k down & take over the VA loan. The realtor loaned us $3K of her commission.

The second house we bought on a Land Contract where we took over the loan & the lender didn't know it. We also only put down $5k, & that was borrowed from my father-in-law. This way is very dangerous. If the lender finds out, they can call the loan due, & if you can't refinance, you lose the house. We were given 5 years from the seller to refinance. If we couldn't qualify for a loan or sell the property, the seller could foreclose on us.

Both of these situations were in a buyers market. Meaning there were a whole lot of sellers with no buyers. If they have to sell because of a job transfer & stuff, they can get really motivated.