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Can You Buy A Home With No Down Payment?

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Coming up with a down payment in today’s economy can be difficult.  In most cases the down payment is expected to be 20% of the purchase price, and in some markets where housing prices are high that can be nearly impossible for the average person to save.  So are there ways to get around this?  Can you buy a home even if you don’t have the down payment?  There are a few ways to get into a home in spite of lacking the required 20%.

The 80/20 Loan

Also known as a piggyback mortgage, an 80/20 loan is a simple way to get a home without a down payment, but it can be a bit more expensive-or a lot more.  Basically, you take out a separate loan for the 20% portion of the purchase price.  You are financing your down payment.  You then take out a larger loan for the remaining 80%.  The interest rate on the 20% loan is usually a lot higher than the larger loan, so the best bet for any homeowner is to pay it off as quickly as possible.

The 20% portion of the loan is usually on a shorter term than the larger portion as well, and may have a balloon payment.  This means, for example, that the loan might amortize over 15 years, but after 10 years a balloon payment is due-meaning you have to either refinance or pay the balance.  There are also some variations on this loan, such as an 80/15/5 loan, where you put down 5%, take out a 15% loan for the rest of the down payment, and then finance the remaining 80% as a standard mortgage.

100% Financing Loans

While this type of loan used to be easier to get, today fewer places offer them.  There are still some places where you can get 100% financing on your home, but be prepared to pay PMI-Primary Mortgage Insurance.  This is something that the mortgage company will charge to protect themselves against the possibility that you will default on the loan.  It is charged on any loan when more than 80% of the value is being financed in most cases.  These 80/20 loans avoid PMI by financing less in one loan.

It is possible to buy a home with no or very little down payment, and there are a few other special programs such as FHA loans out there to help.  Do your research, and be sure you know which option will best fit your budget.

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FIVE WAYS TO MAKE YOUR HOME BRIGHT, COZY AND CHEERFUL

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Fix it up: The light fixtures in your home are a reflection of your personal style and taste. Adding additional fixtures or replacing ones that aren’t your favorites can be a fun and creative way to brighten up your home!

Candlescaping: Candles are generally inexpensive and are extremely versatile. Adding various candle arrangements to different rooms in your home will instantly create an atmosphere of warmth and style. Get creative! You might also favor scented candles to add a pleasant aroma to different areas of the house.

Mirror, mirror, on the wall: Mirrors not only create the illusion that your rooms are even more spacious than they already are, they also reflect light! Make your house warm and cozy by adding a few inexpensive mirrors in hallways, bedrooms, and living spaces.

Light the way: Lighting isn’t just for indoor decorating—it’s also a valuable addition to the exterior of your home. Line your walkway or garden with cost-efficient solar light fixtures (no electricity needed!) to create a brilliant nighttime landscape outside your home.

Open up: During daytime hours, keep your draperies and window coverings open. This will not only allow your home to absorb heat, but it will brighten up the winter days that you spend at home.

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FIVE WAYS TO SAVE ENERGY IN THE COLDER MONTHS

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Set the timer: Program your thermostat to reach lower temperatures while you’re sleeping or out of the house. This simple action can save you a lot of money—and will ensure that your house stays at a comfortable temperature at all times.

Open and shut: During daytime hours, keep your blinds, draperies and other window coverings open. This will enable your home to absorb the warm afternoon sunshine and will effectively add heat to the entire house. Close all window coverings at night to keep the heat in!

Installation time: If you have a window or two that feels drafty no matter what you do, consider installing tight, insulating shades to those particular windows. You’ll be surprised what a little bit of extra insulation can accomplish!

Light a fire: A fireplace is an easy solution to add extra heat to your home without adding to your energy bill. Capable of warming the entire room, you and your family can relax at home while keeping the thermostat at a lower temperature.

No leaks allowed: Check doors and windows for drafts and places where air might escape. Weatherizing windows and doors is a simple task that you can perform; your local home improvement warehouse will have all of the materials you need!

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FIVE QUICK TIPS TO GET YOUR HOME READY FOR WINTER

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Roof repairs: If you can safely get onto your roof to inspect for missing shingles or other factors that may lead to a leaky roof, now’s the time to do it! If not, call in a professional organization and have them take care of the rooftop work for you.

Seal it off: Inspect doors and windows to ensure that the weather-stripping is in good condition. This will keep your house warmer and cozier in the winter months.

Hot stuff: Make sure that your heater and ventilation systems are in good working order! Clean out accessible ducts and replace filters where necessary.

Chimney sweep: Creosote, a black substance that builds up in the chimney when wood is burned, can cause chimney fires. Inspect your chimney for creosote and call a chimney sweep to keep your fireplace safe and functional.

Gutter check: Now’s the time to clean out those rain gutters again! If you want to do it yourself, make sure that you can safely access the gutters and then scoop out any debris, blast the drains clean with a high-powered hose, and repair any leaks you may find along the way.

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FIVE QUICK TIPS TO PREPARE YOUR HOME FOR GUESTS

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Plug it in: Make sure that all of your appliances are in working order. The last thing you need with a house full of guests is a broken dishwasher or washing machine!

Make space: Clean out the dressers and closets in the guest room(s) to ensure that your friends and family will feel comfortable and at home.

Baby-proof: If your house isn’t already baby-proofed and if small children will be coming to stay or visit, take a little time to ensure that electrical outlets are safely covered, sharp edges are padded, and that valuable knick-knacks are out of harm’s way.

Light your fire: Make sure that your fireplace and chimney are clean and in working order. Gathering around the fire with friends and family is a cozy way to spend time reminiscing and chatting.

Knock knock: Take a walk through your home and inspect all doors and windows. If the doors, hinges or latches are sticky or squeaky, make any necessary repairs before your guests arrive. This will ensure privacy for them AND for you!

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FIVE FUN SUMMER ACTIVITIES FOR HOMEOWNERS

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Barbecue: Nothing says summertime as much as an old-fashioned barbecue! Do you have friends or family who still haven’t had the chance to see your beautiful new home? Invite them over for an afternoon of sun, fun, and a tour of the house.

Campout fun: Another longstanding tradition is the summer campout—but this doesn’t mean you have to drive hundreds of miles to find a great location. Your backyard is a great camping spot! Dig the flashlights, tents, and camping gear out of the garage and thrill the kids with a backyard campout!

Cool and clean: It might not sound like fun, but having a neighborhood car wash is a great way to keep cool and make friends with the people who share your street. Rally the neighbors and make a day of it—the kids will have fun squirting each other with the hoses, and you’ll have a shiny, clean car!

Who dunnit: Throw a mystery dinner party, and invite your guests for an evening of fun and intrigue (and show off that dining room!). Kits can be purchased at most toy stores (or via the Internet) for a reasonable price, and you’ll have a wonderful evening that will be memorable for everyone!

Grab a mallet: While you may have once thought that croquet was a “sport” for fuddy-duddies, it is rapidly growing in popularity. Show off your perfectly manicured lawn by inviting a few friends over for an afternoon croquet party. If you’re feeling really adventurous, try some horseshoes as well!

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