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I've purchased several homes, the latest was an income property about 2 years ago. I am extremely stingy with my cash and have never paid a down payment on any house or car.
Just be sure you set a budget and stick with it.
I'm trying to figure out how to get situated to be able to purchase our first home. I've heard various rumors of how much of a down payment you should have when buying a house...anywhere from 5 to at least 10 percent. But then I've also heard that with the market these days you don't even have to have a down payment at all.
What is the truth?
I've purchased several homes, the latest was an income property about 2 years ago. I am extremely stingy with my cash and have never paid a down payment on any house or car.
Just be sure you set a budget and stick with it.
I'm fairly certain the days of zero down for a home are absolutely over. You will likely have to have at least 10 percent if not more down.
It sometimes depends on your credit. Right now the banks are very careful who they lend to, but if you have good credit and a stable income, you are going to get some good deals right now because of the market.
You can find some good deals on homes right now because some people are desperate to sell due to financial difficulties. You may be required to put some money down and as mentioned above, you may not be required to put anything down. Are you looking to buy a brand new home?
If so, they are some great deals going on right now because of the market.
Nah, ten is a little to high. There's to much need on the other end nowadays for them to stick to with that, but your credit had better be spotless to start any negotiations.
It doesn't have to be a new house, but that would be great if it was. I know my credit score is in the mid 600s so I'm not too sure that's good enough to get an awesome deal. But I've heard that there are some programs that help first time home buyers?
Its my understanding that right now mortgage companies are requiring higher than that even for people with excellent credit or you pay some outrageous closing costs.
I've read a little here and there and could be really mistaken since I've just skimmed the subject because of the economy.
http://www.washingtonpost.com/wp-dyn...021204259.html
This is the kind of stuff I'm talking about
Under Fannie's and Freddie's new guidelines, even applicants who assumed that their FICO credit scores would get them favorable rates will be charged more unless they can come up with down payments of 30 percent or more. For example, a buyer with a 699 FICO score who brings a sizable down payment of about 25 percent to the table will be hit with a 1.5 percent "delivery" fee at closing under the new guidelines.
A buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Even someone with a 739 FICO -- once considered a platinum guarantee of the best rates available -- will get dinged with a quarter-point add-on.
I too have heard about the higer down payments.
I'm working through this right now so I can tell you first hand whats up. I've called no less than 30 banks in the last two weeks and thats no exaggeration.
Zero down is nearly out of the question....you need some kind of equity if you expect to put nothing down out of pocket.
5% seems to be the going consensus with many places requesting 10-20% existing equity or money down. The larger the bank the less amount down required but the closing costs and rates are re ed. I did come across a few banks with zero down available with 680 or better scores however their closing costs were insane. Basically they're going to get some equity one way or another.
FICO is seemingly playing a much lesser role than I expected with the mid-sized and small credit unions (which I specifically targeted). My scores range from 704, 694 and 635 ( you experian) Basically I have good credit with experian refusing to remove some out of date and keep an accurate tabulation of my revolving debt, if they would just update my ing credit cards (its been three months) my score would be up around the other two. It didn't matter since I'm clean and have two good bureaus nearly all the banks said Experians scoring wouldn't mean diddly. I printed out all of my bureaus and my scores to keep from running my credit all around town. Most loan officers didn't have a problem meeting with me to discuss my options based on what I presented vs. them pulling my bureau. However at some point if I go with them they'll obviously make the inquiry.
Prices aren't as great and wonderful as people think Texas home prices are still somewhat on the climb and new homes despite the lower margins are still more expensive than 5 or 10 years ago. Marketing however will say something completely different.
As a first time home buyer who actually owns his own land a modest house priced between 125k-140k is still going to require a pretty stout amount down. Many banks wanted at least 10k.
I'm cringing at the thought but I'm strongly considering a manufactured home because its much less expensive and since I have two acres the massive manufactured home depreciation isn't nearly as bad. I'd have a load more square footage too. I'm undecided I really don't feel attempting to save 10-12k just get on board.
Thats just my experience. I recommend printing out your reports and consulting with as many banks as possible to get a gauge on your situation. Just don't fill out any applications.
Furthermore every single bank is scrutinizing debt to income like never before. I'm sitting at 40-42% which in my opinion is pretty good. Half the banks would only consider a deal with a ratio at 35%. This is a huge deal breaker for most people. Absolutely make sure the debt to income ratio is below 40% before trying to do anything.
I believe FHA loans only ask for 5%, while conventional loans are going to ask for at least 10%. I guess it depends on the type of loan you're getting.
Check your PMs GinoFan.
I cringe at the thought of Ash giving advice.
It took me three months to refi even though my DTI is only 22% and all three of my credit scores are above 800.
The process sucks balls and I wouldn't wish it on anybody.
there should never have been days of 0 down for a ing home.
but then again thats only what largely got us into this ing mess.
Don't look only at banks. We financed our home through Randolph-Brooks FCU a few months ago, only did 10% down, much lower closing costs and almost no paperwork. The rates were superior to what most big banks offered at the time (we got 5.4% when most were around 6%). We could have gone less than 10% but wanted to manage our own escrow.
The closers were amazed at both the thin stack of paper and the rate.
I'm going to be looking at refinancing my note sometime in the next month.
I'm hoping for a great deal out there. 6.2% int is just way too much in this market for my credit rating.
Traditionally home values and property values rise. Zero down on a product that goes up in value isn't a bad investment. Especially to a low risk consumer. Zero down deals aren't what created this mess anyway. Risky lending and CDS's with MBS's are the source of this storm.
Seems like 5.15-5.99 is pretty much the norm with scores over 720. Even with an absurd score reaching the 800 mark I wasn't seeing rates dip below 4.99.
0 down = 0 to lose essentially.
If you are going to give a mortgage on something worth as much as a ing house, you have to force the buyer to have something at stake other than their signature.
You'd be correct. It also depends on who you know(as always). I went from 6.5 to 5.25 while my brother went from 6.5 to 4.75 one week later.
His FIL knew somebody pretty high, which my asshole brother didn't fill me in on, which got him the great rate and lower closing costs.
After 90 days of dealing with this stupid , I was happy just to get it done, though.
I'm in total disagreement with your point but the entire purpose of credit ratings between the three bureaus is to determine who's signature is worthy.
I bought a home 2 years ago and at that time with the conventional loan I was told that the norm was 20% down. Otherwise you pay TMI on what ever you are short of and this interest rate is twice as high as your nomal loan is. Things have probably changed since then though.
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