1st Time Home Buyer- Mortgage Question

[Kline12]

Hey guys, as the title states, I am a first time home buyer and will be entering the market pretty soon, hopefully. Have any of you ever bought a house without a down payment? Is it even possible? If it is possible, what banks/credit unions might offer home loans with no down payments as an option? This is obviously a much lesser desired option, but it would put me in the market much sooner if it were possible.

Also, what advice do you have for a first time home buyer? It's a little scary tying myself down to such a long term commitment, but I'd much rather my money be going towards a principal rather than pissing any more away at our apartment complex.

Any advice and comments are welcome.

 

[ibleedblue65]

Hey guys, as the title states, I am a first time home buyer and will be entering the market pretty soon, hopefully. Have any of you ever bought a house without a down payment? Is it even possible? If it is possible, what banks/credit unions might offer home loans with no down payments as an option? This is obviously a much lesser desired option, but it would put me in the market much sooner if it were possible.

Also, what advice do you have for a first time home buyer? It's a little scary tying myself down to such a long term commitment, but I'd much rather my money be going towards a principal rather than pissing any more away at our apartment complex.

Any advice and comments are welcome.

I bought my first home 3.5% down in 2011. I've been extremely lucky and my homes value has doubled in 6 years. I don't believe 0 down is an option but I think you can still get 3.5% down. Downside to this is you have to pay pmi.

Best advice I can give you for a first time home is to buy something that you know will be a good investment. Maybe not 100% what you think you want but trust me your tastes and opinions will change after owning a home. Don't buy something you know will be a tough sell in 5 years. That and get a good agent you can trust to help you make a good decision. And listen to their advice.

Btw good luck man. I hope it works out for you and you come out on top. Home ownership was one of the best decisions I ever made. It's a different feeling when the place is yours and I really enjoy taking care of the yard and fixing things up around the house. It's a source of pride.

 

[jmcgliss]

Not sure if Guaranteed Rate operates in your area but they have a Fannie Mae product with a 3%-3.5% down payment, where they front you (for lack of a better word) 2%, so your net DP is 1%-1.5%. There are additional closing costs to consider. If you find a willing seller, it's recommended that you hire a licensed home inspector to inform you of the condition. As for picking a real estate agent, find one who will create some market reports for you (i.e. in Excel) so you see the big picture. The "here are three comps" approach is totally lame.

 

[lobra97]

even my VA loan reqd about $2k down to move in with "0" down.

 

[Led_Zep]

VA home loan, it's magical.

 

[KingBlack]

VA home loan, not a dime down, and no origination fee because I am a disabled combat vet. You're in SC, so look into MCC....its amazing. In SC, it can save you $60,000, no thats not a typo, over the life of the loan

http://www.schousing.com/

 

[Kline12]

Don't you have to be a vet to get a VA home loan? I'm a noob at all of this, so bare with me with my questions lol. What is MCC?

VA home loan, not a dime down, and no origination fee because I am a disabled combat vet. You're in SC, so look into MCC....its amazing. In SC, it can save you $60,000, no thats not a typo, over the life of the loan

http://www.schousing.com/

 

[Kline12]

Just saw the link and saw the info about MCC. I think I meet just about every one of those qualifications as well. Lots of good info on that page! But anyway, do you HAVE to be a vet to receive a VA home loan?

 

[_Snake_]

Zero down was an option back in 2006 when the market was crazy. It might be much more difficult now, if it's even possible at all.

IF you're able to find something with 0% down (that isn't a VA loan), expect it to be an adjustable rate mortage (ARM) where the rate will become very unfavorable after the ARM period is up, and you'll want to refinance.

So where am I going with this? Find the $$ somewhere to put enough down that you can get a fixed rate mortgage and don't have to pay PMI (extra monthly cost for mortgage insurance). Wait if you must. I can promise you that you'll want to flee the country when the market tanks right before your ARM changes and your monthly payment increases 50-100%. You won't be able to refinance because you can't get a loan.....you owe more than what the house is worth. AND you can't sell without taking a bath for the same reason.

 

[_Snake_]

But anyway, do you HAVE to be a vet to receive a VA home loan?

Yes. VA = Veterans Administration

 

[P49Y-CY]

Zero down was an option back in 2006 when the market was crazy. It might be much more difficult now, if it's even possible at all.

IF you're able to find something with 0% down (that isn't a VA loan), expect it to be an adjustable rate mortage (ARM) where the rate will become very unfavorable after the ARM period is up, and you'll want to refinance.

So where am I going with this? Find the $$ somewhere to put enough down that you can get a fixed rate mortgage and don't have to pay PMI (extra monthly cost for mortgage insurance). Wait if you must. I can promise you that you'll want to flee the country when the market tanks right before your ARM changes and your monthly payment increases 50-100%. You won't be able to refinance because you can't get a loan.....you owe more than what the house is worth. AND you can't sell without taking a bath for the same reason.

^this.

if you put no money down, what will keep you from just walking away from the property if and when market fluctuations occur?

this was one of the big problems with the big housing meltdown 10 years ago... without people being "invested" in their property, they might not really "care" too much about it, so they can just bail and let the bank eat it.

 

[beeradd]

I recommend a 15 year fixed rate.
The savings is huge.

 

[roadracer247]

My advice would be to have as little debt as possible before buying. Get yourself in a good position financially before making one of the biggest purchases of your life. Buy something newer. Maintenance is expensive. Don't think it's as easy as these TV remodel shows make it look. Remodeling is a nightmare. I talk to guys in the Firehouse about their homes and count my blessings that I didn't try and buy a fixer-upper. Anyway, back to the loan stuff; talk to your friends and family and get in contact with whatever mortgage lender and agents they used. This gives you a place to start. It's really helpful if you have a loan agent and realtor who will help point you in the right direction and take a bit of a father role in giving you some first time home buyer advice. Hell, it worked for me. Finally, realize that you'll "qualify" for WAY more house than you should ever buy. So don't stretch your budget. You don't wanna be "house poor."

Good luck.

 

[HEMI LOL]

we just purchased our first home, we close on 4/15. unless you can qualify for a VA loan there are NO zero down loans. this is why my 5.0 is gone.

turned out to be a good thing, where we live the market is red hot and sellers are not paying any closing costs. my advice, have 10k+ cash money in your corner...of coursed base on your budget.

 

[Kevins89notch]

As someone who should have bought 3 years ago but has been too damn lazy, I offer little advice, but I've seen a little first hand experience from a friend who recently bought a house. Whatever the least amount down as of like 8 months ago, is what he did. He did the whole home inspection thing, etc. 3 months later he starts having plumbing issues. Turns out it's the (I might use wrong words here) main pipe from his house to the sewer(under the street). He has a longer than average driveway and the pipe is directly under the driveway. The stress of the potential bill to fix it made him physically ill. Coworkers said likly 5-10K to fix the issue and replace part of the driveway. I didn't see him for close to 2 months. Finally I talk to him and he's all "it's finished, I don't really want to get into it." I ask another friend and somehow they found out it was the cable company burying a line that slightly damaged a pipe which later caused these problems. They 100% paid to the tune of like 6K. You think he would be bragging and super happy right? No, because that stress of a huge bill and not having money ruined like 2 months of his life.

tl:dr... don't buy a house without an emergency fund.

 

[_Snake_]

Agree with the posts about $$. Closing costs will run around $10k, and you'll want that on top of your emergency funds (approx 6 months take home pay).

So you'll need cash for the money down, closing costs, and ~ 6 months take home pay in savings.

 

[13COBRA]

If you can't put money down, wait.

Sent from my SM-N920V using Tapatalk

 

[NJredfire03]

VA home loan. Absolutely zero down. Other than that. You'll need the 3.5%


Sent from my iPhone using Tapatalk

 

[Stanger00]

VA home loan. Absolutely zero down. Other than that. You'll need the 3.5%


Sent from my iPhone using Tapatalk

VA loans have a funding fee, 0.5% of the purchase price IIRC, unless you have a service connected disability with a rate of at least 10%.

To the OP save up for the 3.5% down and then have a savings for unexpected repairs and ask the realtor for a home warranty.


Sent from my iPhone using Tapatalk

 

[Blk04L]

I went through this in late 2014. Only took 3 weeks from start to finish, but those were a fun 3 weeks of scanning/emails/phone calls with the lender.
You definitely want to have an emergency fund of cash on hand.

I bought new with some warranty, but couple of my friends bought lite-fixer uppers, and yea they have dumped some decent coin into them, And it's not just for upgrades. It has been for necessities like AC issues and replacing old appliances.(South Florida).

My 2 cents would be to have some money down 3.5%-5%(last I was in it 3.5 for FHA(?) and 5% min for conventional loan) and have 10-15k for a rainy day fund. I don't recall any non-VA loan that offered zero down.