downpayment for first time home buyer (real estate market, to rent, insurance)

[carolmygirl]

HI,
i have read from the Q&A from yahoo that it is not necessary for first time home buyers for a downpayment? anyone please????
and also i would like to ask if the value of the home is lower than the amount we are pre-approved of, can that mean we can have 100% loan? Thanks folks!!!

[JustJulia]

I would try the Mortgage board. Lots of good advice there.

I think 100% loans are only available in special circumstances now, if at all. I think I read that some VA loans might be available at 100%.

FHA loans can have low downpayments, if you qualify. They're in the vicinity of 3% to 5% down, but there are some strict guidelines about verified income, assets, home price, and so on.

[gardener34]

We did an FHA years ago when we bought ours. With 5% down. Your house has to pass an FHA inspection, which makes some sellers wary of that. But in the economic climate, they may be ready and willing just to sell it.
I highly recommend it as a great way to get into a first home.

[GolfLover2]

Originally Posted by carolmygirl

HI,
i have read from the Q&A from yahoo that it is not necessary for first time home buyers for a downpayment? anyone please????
and also i would like to ask if the value of the home is lower than the amount we are pre-approved of, can that mean we can have 100% loan? Thanks folks!!!

Best suggestion ... get to a qualified professional mortgage banker for answers immediately. Answers are many times subject to your personal financial scenario. By talking to a lender now, you will find out what options exist for you personally. Guidance and assistance will be provided to move you closer, then begin the home purchase you desire. There are a variety of financing options that exist that have differing demands for downpayment. Talk to a lender to discover those that are available for you. If I can help, please write. Best of luck!

[At1WithNature]

I'm sure you can, especially if your credit is good, but the real question is why would you want to do that??? Your monthly payments will be outrageous and if you can afford that large monthly payment, why not save for 6 months to a year first? This crappy economy isn't going anywhere anytime soon.

[Lookout Kid]

In a declining real estate market, I would strongly advise against buying with a low or zero down payment. You will end up "upside down" on your mortage in no time, in that you will owe more than the house is worth.

My wife and I bought our place four years ago with a 10% down payment, and we are teetering on the edge of an upside down mortgage because of declining prices. And if we paid a realtor a commission, we would likely be bringing money to the closing if we sold today.

[ajolotl]

I agree with LK. You become a prisoner in the home with few options if you become close to upside down. In general it's better to rent until you can afford a decent equity cushion.

[GolfLover2]

I wanted to clarify one thing regarding your question. Part of a lender's assistance should include guidance, as well as hard financial information and securing the financing you need. Only through a complete and thorough analysis of your personal finances can a professional mortgage lender offer you the guidance you need and deserve. Honesty is paramount and should it not be in the best interests of a client to currently move forward with a purchase ... they should hear that from their mortgage professional.
That being said, I hope you pursue speaking with a lender soon. That way you will know what options currently exist for you and what actions you should take to best secure a healthy financial future for yourself.
Write if you need more information. Best of luck to you ...

[ngrome]

I believe 100% financing is still available, but the qualification process is going to be very thorough these days. Be prepared to provide lots of documentation, not just your last two pay stubs, but also bank statements, retirement account statements, credit report, etc., everything but your first born. Keep also in mind that you will be paying PMI, or mortgage insurance should you default your loan, put putting less than 20% or nothing down, which will add to your month payments. But I heard they are offering $7500 credit for downpayment these days (to be applied to your loan too) for being a first-time buyer. If you put the work into it and have confidence of good credit and stable job, it's still a good time to buy, good luck.

[ngrome]

Originally Posted by At1WithNature

I'm sure you can, especially if your credit is good, but the real question is why would you want to do that??? Your monthly payments will be outrageous and if you can afford that large monthly payment, why not save for 6 months to a year first? This crappy economy isn't going anywhere anytime soon.

Yeah, but if you look at it, there's real no diffence between putting 0 down versus 6 months salary (like 10 or 20% down), depending on the type of home you get. Maybe anywhere from $50 to $100 over thirty years? Yes, that will be a big difference if you stay at the home forever, but that depends on the person and how long they plan to stay in the house. If you really want to make a dent in the mortgage, putting 40 to 50% down would do it, but how practical is that?

I have two friends who are lenders and they have the exact opposite approach. One of them says, yes, put down as much money to drive your monthly costs down. But my other friend advises buyers to put little or no down, if they qualify, so they can have some money in the bank (assuming they saved that money for a down), in case of an emergency or job loss. I tend to agree more with the latter approach, because if you don't have that money saved up and spent it all on the downpayment of the house, you don't have a few months cushion to look for work while keeping your home, had you not used it all for the down in the first place.