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How Can I Buy a Home In Arizona With No Money Down
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What some say is a real estate meltdown others see as a huge opportunity to buy real estate in Arizona. If you know what you are doing you can make yourself a great deal in a very temporary situation.
If I only knew then what I know now, life would be a lot different for myself. I am not complaining, just stating an observation about my past and my involvement in the real estate industry. My first experience in a down market in Arizona came in 1989. I was just out of college and working for Realty Executives at the time as a Realtor. Homes were not selling. Everywhere you drove you could see listing signs; not unlike driving around Phoenix today. I had about 30 listings of my own that were not selling. Home sellers were so desperate that they were practically giving property away, but I was young and too chicken to act. I could have bought a house then, but I did not.
At that time, there were tons of “no qualifying” FHA loans on properties. You did not have to go through the bank to get a loan. All you had to do was sign a piece of paper stating that you would assume the responsibility for the mortgage. It did not matter what your income or assets were, only that you were interested in buying the property. Essentially you could be a home for no money down and no money out of pocket. While the loans that were popular then were FHA, today there are other types of loans for 100% financing.
You may say to yourself “I do not have any money to buy a home now.” “How am I supposed to do this?” The truth is that you do not need any money to buy a home. You can still get 100% financing in Arizona as well as most other states. Most loan programs allow for a seller to pay for your closing costs as well. You can get up to 6% seller contribution on most Fannie May and Freddie Mack loans. These loan programs are called My Community Mortgage with Fanny May and Home Possible with Freddie Mack.
When the market for Real Estate is good in Arizona, you will probably be paying your own closing costs. When the market is bad, you can probably negotiate with the seller to pay all of your closing costs. In an up market, where sellers get their price and buyers have to pay top dollar for homes, like the market in 2005, sellers would not pay closing costs for their buyers.
These first time home buyer programs are great, but they do have some limitations as they put a cap on your income. Typically you cannot make more than the average median income of the county that you are looking to purchase a home in. The good news about most Arizona counties is that Fannie Mae and Freddie Mac do not have income limits on these loan programs like other states. This is especially true about Maricopa County which is home to Phoenix and in Pima County which is where Tucson is located. The great news about this is that you can get a mortgage up to $417,000 with no money down no matter your income. With the average home price in both of these counties and cities being well below this maximum loan amount there are many homes that can be purchased with no money down.
If you negotiate with the seller and have them pay your closing costs, you are doing what most people only dream of: buying a home with no money down and no money out of your pocket. You do not need to buy the tapes or CD’s or DVD’s from the “no money down” real estate guy Carlton Sheets. I am telling you how to do what he is telling you do for free.
I can promise you that the market in Arizona will not stay like this forever. Every month thousands of new people keep moving to the Valley of the Sun. The excess inventory will be absorbed and prices will stabilize. As Mark Twain once said “Do not wait to buy real estate, buy real estate and then wait. That statement could not be truer than it is today. Happy house hunting.
Written by Dave Mason, Realtor
This Article is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
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