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Is it at all possible to buy a house without a down payment?
About the only loan I know of without a down payment requirement is a USDA loan for rural areas. But I heard they will run out of funding by end of April.
If you have exceptionally good credit, and you have cash in the bank, and if you are not trying to buy more house than you can comfortably afford, there are cirumstances where you may qualify for 100% financing. The cash on hand is viewed a your cushion against disaster, ie., job loss, medical emergency, etc.
When we sold our house in November, this was the category our buyer was in. Single mom (1 infant) with an excellent job and a good cash reserve which she wanted to hang on to "just in case", which is actually smart if you can get a lender to go along.
As mentioned previously - VA, rural housing loans. Also, check into local programs such as NACOG that provide down payment assistance, especially to first-time homebuyers. They don't always have $$'s, but have some nice programs when they do. Also check out FHA loans. Guidelines change from time to time, but they have been allowing gifting of the 3-1/2% required downpayment. (I think I heard that will be eliminated soon.) The best resource is to talk to an experienced mortgage lender that offers different types of financing.
I have a similar question, what if you have another property and don't want to refinance it to get a down payment available, can you somehow use that as "proof" you're a good risk and get 100% financing?
I have a similar question, what if you have another property and don't want to refinance it to get a down payment available, can you somehow use that as "proof" you're a good risk and get 100% financing?
You will have to meet underwriting requirements if you own another property. If you can qualify for the mortgage AND carry the mortgage on the other property you may qualify. If there is a tenant in the property the bank writing the mortgage will include a portion of the income and all of the expense in its calculations.
My husband and I were able to do this in the mid 1990's but we had a down payment of 10%, not 0%.
Other questions, what is a rural area defined as? Does it vary by state? Also what if you own a home with no mortgage on it, but you want to buy a home in a different state first, move to it first, then sell the previous one....would you have to have a down payment then?
Thanks.
you aren't ready for the responsibilty of homeownership if you can't manage to save a downpayment, not even 3.5% for an FHA loan. what are you going to do if you have a major repair? having saved money for a down payment and for emergencies shows that you will likely be able to keep the home once you do buy. whats the point of buying if have a higher chance of losing it because you were not ready?
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