How big of a problem is it for 1st time home buyer w/ no down payment?

Question

We're going to look at a house that is a steal at $119,000. But we weren't really planning to buy so soon, and don't have a down payment. Would this be a big problem?

Answer 1

YES.

Unless you're a veteran, 0% down or 100% financing isn't available and is a bad idea, particularly in a market with declining home values.  It means the buyer has NO equity, no ownership in property at all. And giving loans to such people is why the foreclosure rate is so high, along with the declining value of homes.

FHA requires minimum of 3-5% down for their loans.

You're not ready to buy.  You need to BUILD your credit rating and SAVE for the down payment and closing costs.

Answer 2

no. since it is as you say a steal ask th seller to pay closing cost and title insurance and to participate in a non profit for the down payment then raise the asking price to cover all of this and FHA Will let this happen. But, you must act quickly as DPA program is going away so they say OCT1

I am a mortgage banker in TN & KY

Answer 3

Check with your states housing finance agency to see if they have special programs for 1st time buyers. Ohio has some good ones that offer down payment assistance options or affordable 2nd mortgages to help with down payment and perhaps some closing costs. They should have a list of participating lenders on their website as well as the program details.

Here is a good reference for you to find your states HFA:

http://www.ncsha.org/section.cfm/4/39/18...

VA is an option for 100% if you qualify and the USDA has a program for 100% in rural areas. Other than those, 100% financing options are hard to come by.

Gifts from relatives could be an option too.

Seller funded down payment assistance options are going away and anyone planning to use them probably needs to be closed by the end of September before HR3221 goes in to effect.

Good luck.

Answer 4

Even if the seller is willing to pay closing costs, you will get that reimbursed upon closing. You will still have to shell out for earnest money, insurance, inspections, the appraisal, (which must meet what you are offering) There is no way to do this completely without any out of pocket initial expenses, how do I know? Going through a 100% VA loan as we speak.

Answer 5

Could be; it will depend on what kind of loan you can get, most loans require a down payment. Although they have some special programs for first time home buyers that may not require a down payment, but they don't always give you the best rate.