How to Buy a Home With No Money

In the early 2000s, buying a home with "no money down" was easy. In many cases, mortgage lenders didn't require income documentation to secure a mortgage. Times have changed as mortgage lenders face the sub-prime mortgage crisis, home values are declining, and credit markets have tightened. Getting a mortgage now is very different from getting a mortgage just a few years ago. However, you can still get a mortgage--and you can even buy a home with no money down. Some lenders have maintained "103%" programs, where people with good credit can buy a home and bundle closing costs into the mortgage. In other cases, non-profit groups can help you to get a "no money down" mortgage.

How to Buy a Home With No Money

1. Gather your personal financial statements and evaluate your finances. Can you really afford a mortgage on a home? Does that translate on paper? You will need to prove that you can, in fact, pay a mortgage every month faithfully, so your personal financial statements such as income, debts going out each month, tax forms, etc. need to reflect your ability to pay the mortgage at the time you are applying for a home with no money down.

2. Call numerous mortgage lenders and ask about no money down programs. Such programs still exist, but it may take considerable time and effort to find a lender who will work with you on a no money down mortgage. Ask about "103%" mortgages; these allow you to bundle in closing costs. Every bank or mortgage lender handles "no money down" mortgages in a different manner, so ask for specific information to understand procedures before making any commitment.

3. Meet with mortgage lenders in person and take all of your financial paperwork with you. Be pleasant, polite, and well-mannered. You're making an impression, and lenders want to know that they are lending money for a no money-down home purchase to a person who will fulfill his or her commitment.

4. Clean up your credit report if you have any problems on it. Some online sites such as CreditBoards and FatWallet have forums where you can talk to other people who have extensive experience managing poor credit and rebuilding their credit to a healthy level.

5. Pay off as much debt as you possibly can, or call credit card companies to request lower interest rates. You need to look as credit worthy as possible.

6. Try AmeriDream's no-money-down program. AmeriDream is a non-profit organization that helps people to get into homes with very little, if any, money down, as does the Nehemiah Program.
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How to Get a Home Mortgage With No Credit History

Most people dream of owning their own home but realizing that dream is harder for some than others. Lenders consider a variety of things when reviewing applications for mortgage loans. In addition to a credit history they also look at monthly income, expenses, down payment and house value. If you have no credit history, try some of these solutions to help make your dream of owning a home a reality.

Instructions for you:

1. Save up so that you're prepared to put down a sizable amount of money. A lender is much more likely to take you seriously if you're willing to invest your own funds to purchase a home. A large down payment creates instant equity which not only lowers the lender's risk significantly, it could also get you a better interest rate.

2. Get letters of recommendation from current or former landlords. A letter from a rental agency that states you upheld the terms of your lease for at least 2 years can be as good as a credit rating for a car loan or credit card.

3. Build credit by getting a credit card. If you use it regularly and pay it off every month, or at least make the monthly payments on time you can begin to build a credit history which will help you when you apply for a home mortgage loan.

4. Talk to a mortgage lender to see if they offer any first time home buyer programs. Many banks and mortgage companies have loans available to first time buyers with little or no credit history.

5. Attend a local home buyers seminar to learn as much as you can about the process. The more prepared you are to apply for a home mortgage, the better your chances will be of getting approved.
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About Government Student Loans

Getting a quality education has never been more important than it is today. At the same time, the cost of education has never been so high. If you are looking for a way to fund your education then a Government Student Loan may be the right choice. According to the U.S. Department of Education website, "$83 billion in student aid" will be provided this year "to help millions of students and families pay for post-secondary education."

About Government Student Loans
The U.S. Department of Education's Direct Loan Program remains the largest resource in providing funding for post-secondary education. As lender, it has set the terms of its loans, eligibility requirements and repayment options. Although there are many private funding sources available, government student loans offer low interest loans you can apply for online. Securing and managing these loans are relatively simple and convenient; and when it comes time to pay, you will be given a considerable amount of flexibility.

Types of Loans
Federal Perkins Loans are granted to full time and part time undergraduate, graduate and professional school students based on financial need. It offers a fixed interest rate of 5 percent. Borrowers can get up to $5,500 per year for undergraduate and up to $8,000 per year for graduate school. Stafford Loans are granted to full time and part time undergraduate, graduate and professional school students. There are two types of Stafford Loans: (1) subsidized and (2) unsubsidized. Subsidized Stafford Loans are based on financial need. The government will pay any interest accrued. Conversely, Unsubsidized Stafford Loans are not based on financial need and borrowers are responsible for any interest accrued. The loan amount can range from $2,625 to $8,500 annually and will depend on what year you are in, whether you are in an undergraduate or graduate program and whether you are a dependent or independent student. Interest rates are fixed at 8.5 percent. Direct Plus Loans are granted to the parents of dependent students enrolled in an undergraduate program. Direct Consolidation loans allow eligible loans to be consolidated into one single loan program with one monthly payment.

Eligibility Requirements
To be eligible to receive a government student loan, a students must: (1) be a U.S. citizen or eligible non-citizen; (2) be registered with the Selective Service if a male between the ages of 15 and 25; (3) have a valid social security number; (4) be enrolled at least part time; (5) have a high school diploma or GED and (6) must not be in default on any federal issued student loans or education grant. Subsidized Stafford Loans additionally require a financial need for assistance and that the school is a Federal Family Education Loan Program participant.

How to Apply
The first step in obtaining a Government student Loan is applying for PIN and completing the FAFSA application. You will need your social security number, W-2 forms and 2008 Federal Income Tax Return. If you are applying as a dependent, you must also provide the requested documentation for your parents. If you are married you must provide your spouse's Federal Income Tax Return. You should also have any records for untaxed income such as child support, your current bank statements and alien registration number if you are not a U.S. citizen.

After you complete the online application, you will receive your Student Aid Report (SAR) which summarizes the information contained in your FAFSA application. Your SAR will also include your Expected Family Contribution (EFC) and pin number used to sign your application and access your records. You must review your SAR carefully. Schools will use your SAR to determine eligibility in a similar way credit reports are used before extending credit. Once you have been approved for financial aid, you will receive an award letter that includes the amount you are eligible to receive. You will be asked to sign and return the award letter.

Loan Repayment
Upon completion of your program, you will receive your repayment schedule including the monthly payment amount, number of payments and when your first payment is due. Based on your circumstances you may be eligible to apply for a deferment or forbearance. A deferment will stop payments for a certain period of time. The forbearance is temporary reduction or postponement in payments usually for those who do not meet qualifications of a deferment.

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How to Stop Student Loan Debt

The U.S. Department of Education's Institute of Education Science reports that, in 2007, the average amount of aid given to college students was $9,100. Of that amount, 38 percent of students received student loans, averaging $7,100. The hefty amount of financial aid given to students as a loan means that many are saddled with student loan debt at graduation. These figures are compounded when students continue their education at the master's or doctoral level or in law or medical school. You can stop student loan debt in several ways.

Instructions for you:

1. Apply to tuition-free institutions. Though several European countries have offered free college educations to their citizens, the United States has no such tradition. However, several American universities (including Princeton and the University of Virginia), as of 2011, offer financial aid packages to prospective students that include no student loans.

2. Pay as you go. While studying, refuse student loans and pay for courses as you proceed through college. This option can lengthen the time of your studies, because it may require you to work part time and study part time, but it is a way to avoid loans while attending college.

3. Seek scholarships and fellowships rather than loans. Though scholarship opportunities wane during hard economic times, some are available for students with excellent academic records, for students in areas of study where the government has identified a need for more professionals, and for students who belong to ethnic and cultural minorities. Many opportunities are listed online (see Resources) through websites that maintain databases of scholarships and fellowships.

4. Study, volunteer or work in a field where debt forgiveness or tuition programs exist after college. As of 2011, participants in programs such as the Peace Corps, AmeriCorps and VISTA, or graduates who practice medicine or law in disadvantaged areas, can receive loan forgiveness or payments toward student loan debts. In some cases, including those in the military, tuition payments are given when service is completed.

5. File for bankruptcy and ask the court to dismiss your student loans. Petitions to dismiss student loans in bankruptcy are very rarely granted, but if you can prove hardship and lack of income over a long time, your claim may be successful. This is an option of last resort.
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How to Transfer Student Loans

Keeping track of multiple student loans -- when each payment is due and how much to pay -- can be confusing. Consolidating these loans into one program can simplify things and may save you money. (Always keep your federal loans separate. The the interest rate is far lower than private loans, and you can not consolidate private loans with federal loans.)

Instructions for you:

1. Gather the statements for each of your student loans and check the interest rate for each. You will want to transfer loans with higher rates to the loan program with the lowest rate. Doing so may actually save you thousands of dollars in the long run.

2. Contact the financial institution to which you want to transfer all of your student loans. You can find the phone number on your monthly billing statement and on the institution's website.

3. Speak to a customer service representative and request to transfer your student loans from the other financial institutions. For each of your loans, you will be required to provide the financial institution's name, the account number (found on the billing statement) and possibly your username and password for the account.

4. Request a letter from the financial institution to which you are transferring your loans to confirm the consolidation. This letter lets you know the transfer is a success and shows your new monthly payment and overall debt.
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How to Handle Defaulted Student Loans

Unpaid student loans can wreak havoc on your finances and your credit score if you wait too long to get the situation under control. Once your loans enter default status, the Department of Education can take your tax refunds, garnish your paycheck, sue you in court or take part of your federal benefits. If you receive a default notice, take action as soon as possible to prevent collection actions for unpaid student loans. The longer you wait to act, the more difficult it will become to get your loans out of default.

Instructions for you:

1. Consolidate your loans by signing up for a program like the federal Direct Consolidation Loan Program. With this program, the federal government lets you package your student loans into a single loan with different payment options. The newly combined loan will be out of default status. Check the official website of the DCL program to see if your loans qualify and how to apply for consolidation. To use the Direct Loan Consolidation option, you must have at least one Direct loan, such as a Stafford Direct, or one Federal Family Education Loan, such as a FFEL Plus.

2. Gather proof of financial hardship if you can't consolidate you loans. Hardships such as unemployment or a serious illness might entitle to you special repayment options on your defaulted loan. To qualify, you will need to provide documentation, such as copies of your medical bills.

3. Ask for a defaulted loan repayment plan such as the Income Contingent Repayment Plan. Repayment plans let you get the loan out of default and negotiate payments you can afford. Explain any financial hardship you are experiencing and complete all the necessary paperwork. You must make the number of timely payments required by the plan -- usually nine over a 10-month period -- to get out of default. Once you've completed the repayment plan, your loan usually goes to a new loan servicer and you get a standard 10-year repayment schedule.
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How to Calculate Student Loans

Obtaining a student loan is often a necessary step for most students who apply for college. Before making the commitment to what could potentially be a large debt, it is important to know what is expected once you graduate from college. In order to calculate your student loans and how much you are estimated to pay back, you need a few pieces of information and an online student loan calculator.

Instructions for you:

1. Gather the necessary information. This includes the loan amounts and interest rates for current loans as well as the student loans you plan to take. Classify them by the type of student loan.

2. Determine the interest rate for each loan. For instance, the fixed interest rate is 6.8 percent for the Federal Stafford loan, which is a student loan; 7.9 percent for the Federal Parent Plus loan, which lets parents borrow to cover costs not already covered by the student's financial aid package; and 5 percent for Perkins loans, which are also student loans. Private student loans and consolidation loans will have varying interest rates: check with the financial institution for more details.

3. Note the minimum monthly payments that are required for your loans. The minimum monthly payment is $50 for the Stafford and Plus loans, and $40 for the Perkins loans.

4. Locate an online student loan calculator, such as FinAid's loan calculator (see Resource).

5. Get the loan fees. Loan fees are used to adjust the loan balance so that the borrower receives the original loan amount after the fees are deducted. In other words, the fees are amortized over the term of the loan.

6. Input the fields in the FinAid loan calculator and click "Calculate." For example, if the loan balance is $50,000, the loan fees are 5 percent, the loan term is 10 years and the Stafford loan interest rate and minimum payment amounts are used, then the adjusted loan balance is $52.631.58 requiring 120 monthly payments of $605.69. The total amount of interest paid over the term of the loan is $22,682.11, which brings the total cost of your student loan to $72,682.11 (50,000 + 22,682.11).