Ask Money Doctor






By: Dan Merrick


Judy from Pennsylvania writes that she is looking for a house but she does not have the traditional twenty percent down for a bank loan. “Can I still get a house”?


Sure you can Judy, and here are some ways you can do it:


Find a contract for deed or trust deed seller. A contract purchase like this is a good way to build credit and equity in your house and later refinance when you have a greater equity. A deed of trust or Contract for Deed, in some states it’s called a land contract, can often be obtained with better terms than you would get at a bank. This type of agreement is used when the seller is going to be your bank. As with any legal contract, insure that you have a lawyer go over your agreement before you sign.


A safeguards to have in your contract in such cases would be a limit on the sellers refinancing. In other words, if the seller is going to refinance the house after you purchase it, insure that he can not over finance it above the amount you will be paying back. Legal assistance will be required in this part of your agreement.


If you are a Veteran you can purchase a home no money down. Check with your local Veterans service representative or go online to VA.GOV


Low income and disabled can also get a home no money down with good credit. HUD and Rural Housing websites have links to these home purchase programs at HUD.GOV


Real estate owned or REO. Many banks and loan companies have properties that need rehabilitation or that have been foreclosed on when the homeowner failed to make payments. You can go to OCWEN.Com and look for there real estate for sale. Ocwen also has many US Government repossessed properties at this site.


No money down Rehabs. There are many companies that will give you money to have a run down property fixed up if you are going to live there. My company worked with a property like this recently and we have had great success with low cost fixer-uppers.


Tax Sale or Auctions at the court house. If you do have a little money saved up, a trip to the court house can prove enlightening. My company recently purchased over $40,000 in appraised value of property for less than a thousand dollars. Tax repository properties that are owned by the county can be a great way to get a real challenge in a fixer upper and give you a chance to own your home with just a little paperwork. Repository properties are owned by the county after the house or land failed to sell at the tax auction. You can usually get these for pennies on the dollar because no one else wants them. Hire an inspector and do your home work on this one. If the work is more than you can handle seek professional help.


If you’re thinking of fixing it up your self get skilled labor for the tough stuff like electrical wiring. Home depot and Lowes have a list of contractors you can use to get remodeling work done. Check with your local building supply store and check references before you sign a contract.


If you have a house in mind, you can also contact a local loan broker who will have access to non-traditional ways of financing your home purchase. Many loan brokers have resources to arrange high risk and bad credit lenders that will loan up to 100% or more of your home purchase.





Dan Merrick is the CFO of RDJC, Inc. and the author of ‘Instructions To Money’ From Welfare To Millionaire published by Outskirts Press. If you have a question for Dan about your business or money you can write:’ Ask Money Doctor’ 125 W. Main Smethport, Pa 16749 or you can go to his web site and post your question on the message board. The ideas expressed in ‘Ask Money Doctor’ are for personal informational and resource purposes. For professional investing suited to your financial needs the advice of a competent licensed broker, tax consultant, CPA, or advisor is recommended.