by Martin Ward Jr.

Created on: October 11, 2007   Last Updated: March 15, 2011

    You hear those words “Down Payment” and immediately begin to worry. You say, “I am near broke now, how will I ever afford my own home?” Take a deep breath and relax, most people worry, because they are scared of the unknown. As you learn, more the scariness is about to fade away.

     When your looking to buy a home the down payment is the first thing you think, will hold you back. Traditionally in the past, you needed 5% to 20% of the cost of the home as a down payment. This is very true when dealing with some real estate agents, but there are other ways of getting into a house.

    If you have saved some money to put down on a home, (congratulation), you are one step closer and there are a few real good reasons for this; the first one is it could lower your monthly payment, the second is it shows your commitment to buying the house, also it may help you get a more appealing interest rate.

    Many banks these days do offer a 100% financing. I am sure this sounds good to you. If this is your first home or not and your credit rating is good, this may be the way to go. The interest rate may be slightly higher than that of a person that does put down 10% on the home.

    There are other ways to get into a home with out putting down a large down payment. If your credit is less than perfect, don’t worry. Have you ever heard of a land contract?

    Land contract are just like getting a loan, though in this case you are usually borrowing money from the owner of the house. Houses that are “for sale by owner” are more likely to offer this. This is one of many creative ways to buy a house and yes, it does work. This is how I bought my first home. Yes, there was a real estate agent involved. Find a real estate agent that is willing to help you in this way may take some looking, but they are out there.

    With a land contract there is risk however, more so than that of a loan from a bank. You cannot miss any payments, you can be late, but unlike a bank, this may cost you more than just a small late fee. The house payment should be your first priority.

    On the up side to this, you can defer the down payment with a promissory note (that basically is saying you will pay a certain amount of money at a later date).

    The land contract that I used said; I would also go to the bank

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