Mortgage without down payment (Louisville: credit score, loans, buying a home)

[jdierickx]

Hello there -
Nice and interesting forum discussions around here.
My wife, 2 sons and I are going to relocate from Luxembourg (Europe) to Louisville in early January 2008 (we're french ). This is a company relocation. We came last week for a first tour and we found the environment pretty interesting for raising children and having a quiet life.
We were very impressed with places like springhurst or Owl Creek and we would like to focus ourselves on these residential areas.
We will keep our house in Europe that will be rented but since we spent most of our resources in this house we do not have any cash for a down payment. I would like to know if any of you knows some reputable and reliable credit institutions that offer mortage facilities without down payment obligation? I know a bit about that sub prime issue in the US and I would like to avoid any sort of credits like this.
Many thanks in advance. JD

[tomocox]

You are asking a lender to bet on the come. Assuming you are buying a home for it's maximum market value, your credit history would have to be extensive and almost perfect. Two or three years ago, lenders were happy to make a 100% loan as property values were increasing; however, that has all changed. Certain value homes in most any market nationwide have taken a downturn in price. One of the issues a lender will also need to consider will be your citizenship status.

[Off Topic]

Under the current circumstances in the mortgage industry, no-downpayment mortgages are almost non-existent. There are still some VA and FHA loans where you might qualify; not sure if you are eligible if you are not a citizen.

[TimtheGuy]

That is all media hype. $0 down loans are readily available on 30 year fixed rate "A" paper with rates in the 6's.

AND, you do not need perfect credit. Mid to upper 600 scores are plenty and some low 600's may work as well.

[tomocox]

Tim, while you are pointing out what I knew and know, facts are, so long as the market is driving home values to gain 10% or more per year, lenders are realatively safe in making 100% loans. They are even safe in making interest only loans; however, when the market is stagnant, even reversing home values as many markets have felt lately, lenders tend to go broke, ie: Countrywide without the huge assistance of a bank. I assure you that Chase bank won't be allowing Countrywide to write with such liberal underwriting until CW gets its wild and crazy lending back under control. So, my future friend from France, you can still get a 100%, interest only loan, but... as the free market should be allowed to do, you will likely pay a hefty cost for such a loan to cover the lenders overall risk that hundreds of loans bring to a lender willing to make such a loan.

As a Realtor, it is in my best short term interest for such wild and liberal lending, but over the long term, steady "Freddie" is typically best for all players.

[TimtheGuy]

Who said anything about interest only? I am talking Fannie & Freddie, so it has nothing to do with the underfunded (Countrywide). And as mentioned it is not going to be "a hefty cost", but rather in the 6's for rate.

jdierickx, when you get over here go speak to a reputable lender and they will be able to lay out what $0 down options you have (may be somewhat limited due to lack of US credit score???) and like you mentioned, definitely avoid any subprime options.

[jdierickx]

Many thanks for your feedback to all of you. Over the week we spent in Louisville 2 weeks ago my wife and I found people very friendly. We may be able to gather these 5% down payment minimum that would allow us I believe to apply to some more reputable banks (eg. Wells Fargo) with some more favorable credit conditions. I do not have any pending credits at the time being by the way and therefore I guess that my rating must be pretty good.
With regards to the areas for living as I said we very impressed with Springhurst or Owl Creek. Can some of you think of other areas like these (ie. safe, clean, not too old, nice houses...) and that would be no further than 10-15 miles from the St Matthews area?