Mortgage Questions
 

Well I'm 25 years old and still live at home with moms and pops. I think it is time i need to move the hell out. Plus my GF is almost done college. Anyway has anyone or can you get a mortgage with no money down. I'm looking at a house that is 119,000 (what the are asking) With no money down and roughly 5% interest rate my payment would be around 650 a month for 30 years. I can make that with no problem. I make around 40,000 a year now.


The problem is i have nothing saved up to put down. What i do have saved up i will need to furnish the place. I am seeing alot of this 20% down stuff. Do i need 20% down???


The only other payment i got is the Harley and that is 250 a month. My truck and car are paid off. I just paid the truck off last month. Also the Harley is for sale right now. So I'm hoping to get rid of that payment.


Any advice or info would be great.

Also my credit is spotless. Was never late in the 5years on my truck loan and never late on the harley at all. All my CCs i was never late on. So i know my credit wont be a problem it is the down payment stuff that scares me.

I wouldn't expect to get a mortgage of that size with anything less than 10% down, also you can pretty much plan on that payment being about $900 a month or more when you add in escrow for taxes and insurance.

Also if you do come up with the down payment amount be prepared to show where the money came from, it can't be a gift from someone like your parents or a loan from some other source. They like you to prove that you had that money sitting in the bank for a year or more.

Have you kept your balance on your credit cards to ONLY 25% of the available credit? If not... your credit score could be lower than you think.

Have you checked your credit score? You can't GET the "no downpayment" option without a really high score.

I KNOW you don't want to hear it, but..... at ONLY 25 years old, you haven't got the LENGTH of "credit history" that many lenders would want to see.

There are options, though. Do you KNOW anyone who is a friend of the family or who knows you that would sell their house with Owner financing?

Your GF is still in college and has no "earning history." I suggest you rent until she has been working for one year, put dang near EVERYTHING she can make in savings FOR a downpayment, and go from there NEXT year. Mortgage rates SHOULD still be very low.

He he You are in luck son. Before driving truck I was a mortgage broker for a year. Actually a broke mortgage broker, which is why I now drive truck.:lol:

Anyway, you need to talk to your local bank or a broker to get current information as alot has changed in the last year. But before that, yes you could get a zero down loan. There were several programs all with pros and cons. To get a conventional loan with the best rate you need 20% down. If you do not have 20% the lender requires you to purchase Private Mortgage Insurance. Basically it protects the bank in the event you default before you built up any equity. As a guideline figure about $100 a month for your 119,000 loan. Once you have 20% equity in your house you can get the PMI removed. Another way is whats called an 80/20. This is two loans, one a fixed rate for 80% usually slightly higher rate than conventional and a second equity loan for 20% at a variable rate. I would think a zero down loan is very difficult to get right now because that was part of what led us to this current mess. But start by calling a reputable bank in your area. Go ahead and talk to brokers too as they might be your only option but be careful as they are slick like a car salesman. The real estate office listing the home probably has an in house broker and that might be a good option. Keep in mind that closing costs can be $5000. Some zero down programs used to let you add this to the loan as long as the house appraised for enough money. In other words you would offer the seller 119000 and they pay 5000 of your costs then the house would have to appraise for the 119000. After you talk to a pro who is up to date check back with me and I help you thru it!:thumbsup:

FWIW, Last year in Feb my 22 yo daughter and her then fiance (now married) bought a starter home with nothing but 3 grand for closing costs. This was thru a local bank with excellent rates but they did add PMI. Not sure if this still being done with the financial meltdown. Bottom line is check with a pro and not us message board heros!:lol:

+1 :clap: Pretty good for a Buckeye :thumbsup:

Thanks for all the great info everyone. I'm just talking right now. Just seeing what my options are. Maybe i should just wait another year. Just save my butt of in the mean time.

Hey snowman. I will call the BANK just for the hell of it see what they have to say. First i want to talk to my oldman see what he has to say.


If i had to i can sell my truck and get 15,000 from that. But why does the bank care were the down payment came from??

They do and they dont. Mike is right, sometimes they wont allow gifts but I have seen it allowed. Each scenario is different. They want you to be commited to the home so there is a better likelihood you will pay for it as opposed to when things are just given to you. My daughter's 3000 was a gift. Start talking to lenders and get educated. When you have good credit you have a lot of clout. Where there is a will there is a way. I also spent many years in auto financing. I have a pretty good general knowledge of financing so let me know if you need any help. I suspect our resident accountant would also be a good source. ;)

Thanks Dobry! I might be having a change of heart. If I wasnt happily married I might have to see what these Wolverine girls were all about! But then I'd have to fight Belpre first and who wants all that mess?