“No Down Payment!” - it's an offer you can't help but notice and be tempted by. Sometimes no down payment can be an absolute blessing and completely work in your favor, but other times it can cause huge financial problems down the track. It may mean that you have to make higher payments, pay a higher interest rate, have a longer loan and basically just pay more overall.



Sometimes you might be willing to pay more in order to have the benefit of no down payment, and that's okay as long as you accept the offer with your eyes open.

But it's very important to be wary - there are many dodgy people in the world of finance who are quite happy to tempt you in with no down payment, knowing that they'll make heaps more money over the long time than if they just told you about the standard deals that were available.

Buying a house with no down payment can be a really good move for people with bad credit or no credit history. This type of arrangement allows them to buy their own home, and as an added bonus it helps them to either establish or improve their credit.

There are plenty of things besides real estate that can be purchased with the option of no down payment. A lot of car dealers now offer no down payment financing, but again, it's important to be careful. This type of financing is aimed at people can't afford the down payment, either don't care or don't understand that they'll pay

more in repayments, interest, and charges, or whose credit isn't sufficient to buy any other way. If you're in that sort of situation, then no down payment financing can be very appealing. If, however, you're in a good financial position, it's probably best to walk away and find out what other options you have. If you have good credit and a reasonable income, there are sure to be cheaper loans you can apply for.

When it comes to contracts, it's always vital to read the fine print and be certain you understand everything about the contract. Make sure you understand what the payments are, when they're due, what the interest rate is, how long the loan will run for, and what will happen if you default on the loan. Yes, contracts can be very boring - but I'd rather be bored than in big trouble because I misssed something on the contract. Remember, no down payment finance is a convenience - and like most conveniences in life, you'll pay for it in some way.

In the end, it's up to you to decide whether or not you want to take that no down payment deal. Much as we'd like to believe that someone is trying to help us out and make things easier, chances are that somewhere along the line they're making a buck out of it. If you understand that, and are happy to pay that buck so you can make the purchase, then go ahead. At least you can go ahead with your eyes open and not get ripped off in a big way.