So, you clicked on the ad and now you're wondering "What's The Catch"?
That is a great question!
It is a very straightforward strategy that helps buyers like yourself buy homes. This is NOT a rental program.
How it works is through relationships that Doxes Realty has developed. We work with lending partners who know that most of our clients are trying to minimize their out-of-pocket costs to buy a home. This simply means we are trying to find a loan product that will either have 0% down payment as a feature of that product. Or to qualify for a home loan with DPA (Down Payment Assistance) that zero's out the down payment.
I should point out beforehand that our lending partners will work with you to get you positioned to be pre-approved for these products. However, depending on your specific financial situation, it may take time. So, some things to consider about these programs. Most of them have higher requirements to get the buyer approved. For example, a VA loan, as well as an FHA loan product with DPA, requires a buyer to have a credit score of at least 640 and a DTI (debt-to-income ratio) of 50% or less. Whereas conventional loan products require a credit score of 740 or above.
That is why it's critical to speak to a loan professional about all the different loan options to understand your individual lending needs and allow them to advise you on the best course of action.
I will say this ahead of the explanation for the next topic. We work with sellers who are willing to pay the buyer's closing costs either partially or in its entirety. The need for the seller to do this is almost 100% dependent on the buyer's buying circumstances. If the buyer can afford to pay the costs, then it gives them a better negotiating position. If not, we help our clients find the sellers who will help them.
What are closing costs? The truth is most buyers are NOT aware of the fees associated with buying a home. There are lending fees and title fees as well as other fees that can add up to thousands of dollars. These are known as closing costs, which your lender can estimate for you at the beginning of the process.
No matter how much the fees are. If the seller is paying those fees out of the sale of the home, then the buyer won't need to find the additional funds to pay at closing.
That leaves what you will have to pay, which is called "Earnest Money". It's simply the amount of money given to the title company to take the house off the market while the buyer works through their loan product to get the loan fully approved and funded. Although this amount is negotiable in the market, it is not unusual for a seller to require 1%-2% of the sales price as an earnest money deposit.
BUT, we work with certain sellers who allow earnest money deposits of as little as $5000.
What does that mean to the buyer who has a 0% down payment loan product and a seller who is willing to pay their closing costs? The buyer, under those circumstances, would only need to pay the $5000 earnest money deposit. So, in other words, $5000 could be all you pay in order to move into a new home. Then, 30-60 days later the buyer will start making monthly mortgage payments toward owning the home outright.
That's the catch.
I hope that answers the basic but most important questions about our home buying program.
If you have more questions, you can schedule a time to speak to one of our agents. Just click HERE 📅 to be taken to our online calendar for schedule availability.
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