What does it really mean when you hear 100% financing

It’s important to understand what 100% financing means when buying a home. Watch to see how you can buy a home with $2,000 out of pocket by using the USDA loan program, backed by the US Government.

Good morning everyone my name is bernice hemmings and i’m a real estate agent with your east atlanta home and i’m here today to talk to you as possibly a first-time home buyer you probably have heard of programs that say 100% financing or zero money down and that that may intrigue you but it can also be just a tad bit misleading and it’s not meant to be in any way

So i just want to clarify for you what that actually means so when you purchase a house and you get a mortgage and most mortgage lenders require a down payment now so that’s one part of the money that you would normally have to have upfront the other part is your share of the closing cost now most of that i can usually get covered by the seller but you will have

To have some money up front in a transaction and i’ll go over numbers in a minute so when you are getting a loan and when you’re buying a home those are the two things that you would normally have to have money for if you do a hundred percent financing programs such as the usda then you are not required to make a down payment you do still have to have some other

Funds and but they will they will finance a hundred percent of the purchase price of the house so that is great because the next best program is the fha loan program and that requires you to have a three and a half percent down payment so on a hundred fifty thousand dollar house that could be right out five thousand dollars that you would need to have so with

The usda loan that 100% financing that you do not have to have that now what do you have to have even if you’re doing a hundred percent financing mortgage so there’s a couple of cost that you would incur at the beginning when you are putting an offer in on a house one is you have to have i’m earnest money and earnest money deposit and this is money basically to

Guarantee that you will continue the contract but there are there are legal things in place to help you so that if you decide you don’t want the home where there’s problems you get that money back it’s actually held by an attorney so and that is usually 1% of the purchase price sometimes we can go a little bit lower than that but you can expect to be one thousand

To fifteen hundred dollars that does go to your bottom line and depending on how things work out you could walk away with a couple of dollars at closing so so that does go to you towards your towards the purchase of the home there are two other fees that are needed one is the appraisal and that is required by the lender and that’s four hundred fifty dollars the

Other fee is not required but it is highly recommended and that is for a home inspection and that is usually between three to four fifty depending on the size and the structure of the house so you can see even with a 100% financing or a no money down loan that you still are going to have to have around $2,000 to be able to purchase a home that is so much better

Though than say the $7000 that you would need to have if you went through an fha program so you don’t have to wait until you save up $7,000 all you need to have is about $2,000 have your ducks in a row financially i have a lender who can work with you if your credits not perfect yet we can work on that and she can help you to get approved and the usda program is

Fantastic it does have a few limitations as far as property goes most of newton county qualifies most of walton county qualifies morgan but jasper they all qualify the very tip of henry county qualifies so rockville county does not dekalb does not so if you have any questions about the usda program 100% financing program i would be glad to chat with you about it

You can shoot me a message below or you can give me a call 7 7 0 8 5 4 1 3 3 0 thanks and have a great day

Transcribed from video
What does it really mean when you hear 100% financing By Buy and Sell with Bernice