(Closed) Buying a house for 0% down?

posted 7 years ago in Home
Post # 3
Member
2829 posts
Sugar bee
  • Wedding: June 2011

Depends on where you are located..

I know in Ontario (Canada) there is a first time home buyers incentive of.. 5%? maybe even 0% (cannot remember atm). However with CMHC & HST you would still end up paying a ridiculous amount.

Maybe try calling some local realtors or banks to see what the up to date incentives and rates are.

Post # 5
Member
1668 posts
Bumble bee
  • Wedding: March 2012

I did! It was 5 years ago and the market was different but I have no regrets.  The only problem is that if the housing market dips (like it did), you are upside down on your loan.  Which means you owe more on the house than you’d be able to sell it for.  This is only a factor if you plan to sell the home soon.  If you plan to be in the home more than 7 years you should be OK.  I would only recommend it if your jobs are VERY STABLE.  I work for the federal gov’t so I was confident that I wouldn’t lose my job and find myself unable to afford the mortgage and having to sell in a bad market for less than what I owed.  As for mortgage info I really like bankrate.com.  A book that I always recommend for first time homebuyers is Automatic Millionaire Homeowner by David Bach.  Ignore the cheesy title – it was really informative and easy and made me feel confident in buying my first home.  We are supposed to close on our second property in a week!  It can be a daunting process but it is made much easier if you know what to expect.

Post # 6
Member
284 posts
Helper bee
  • Wedding: October 2011

I don’t think its possible anymore unless you have a VA loan–FHA loans typically require 3.5% down, and you can borrow all of the closing costs from the seller or be gifted that money from somewhere else. Conventional mortgages require 5-10% down typically, and you can only recieve 3% in closing costs from the seller or gift funds. If you are interested in speaking with a mortgage broker, I would honestly start with a realtor. Stake out realtor.com and then contact a local realtor, let them know that your time frame isn’t immediate and they will normally hook you up with their own broker so that you can get pre-qualified. It doesn’t cost anything, and they can give you an idea of how much of a house you will be able to get into with xx.xx down. Homebuying can be just like planning a wedding, one minute it’s blissful, the next you are rolling on the floor throwing a temper tantrum! Enjoy it though!

Post # 8
Member
10714 posts
Sugar Beekeeper
  • Wedding: June 2012

My Fiance was in the marines so he’ll be getting a VA loan and paying 0 down on our house. I only have ever heard of 0 down with the VA loan though I’m not sure otherwise.

Post # 9
Member
371 posts
Helper bee
  • Wedding: February 2011

There is something called a USDA loan and it is 0% down but you have to be in specific areas (I have no idea what the locations are, sorry!) and I think some lenders/ banks have different things they can offer, for example we have some friends right now that are buying a house with an FHA loan but they are getting a grant for 3% of the down payment, it will bring their interest rate up by a quarter though, and only certain lenders are approved for this grant, so i would talk to some lenders and see what you can find out. Good luck!

Post # 10
Member
2190 posts
Buzzing bee
  • Wedding: June 2011

@MrsPinkPeony: So we have tried doing this, first was with a USDA loan (which we qualified for) but the house was out in the boondocks. Seriously…a grocery store took forever to get to. So we ended up not getting that house…there is a map of area’s that qualify for USDA 0% down online somewhere…

Then we tried getting assistance on another house for the down payment but our annual income was too high (had to be under 70k). Then, we found out that there is another assistance program…but about 80% of the people who apply for it, get it.

So we are saving like crazy since we’ve made an offer on a house, it was accepted and we close in 40 days so we’re trying to come up with 3.5% for our FHA loan. If we get the assistance then all of our savings will just go into our emergency fund or something.

ETA: our lending officer has told us there are a ton of options out there for 0% down but there are some loop holes. Sit down with a lending officer (one that has a good reputation) and discuss your options. There are always options.

Post # 11
Member
4547 posts
Honey bee
  • Wedding: September 2010

I don’t think it’s possible unless you have a VA loan. I know with an FHA (which we were strongly considering getting, but didn’t because we didn’t want PMI), we would have had to put 3.5% down. We ended up going a conventional loan route and putting 5% down. Interest is a little higher, but no PMI!

Post # 12
Member
1668 posts
Bumble bee
  • Wedding: March 2012

@Treasure43: How did you avoid PMI without putting 20% down?

Post # 13
Member
984 posts
Busy bee
  • Wedding: April 2010

Look into your state grant programs. Here in Ohio we found out that there was a grant for first time home owners that would provide us with 2.5% of the cost of a house (the house had to be less than X and you couldn’t make more than X) there was also one for recent college grads that basically was the same thing. The rest of the loan is like an FHA so we only have to come up with another 1% to cover the cost of the down payment. It is really working out well for us. We had no idea such a program existed until we went to look into building and they told us about it. I would do some digging and talk to whomever you need to see if your state offers such programs.

Post # 14
Hostess
18643 posts
Honey Beekeeper
  • Wedding: June 2009

The way to avoid PMI usually involves having a second mortgage after the first mortgage of 80%.

We aren’t doing less down on our loan because we don’t want to deal with the hassle and with housing being so shakey, I would rather have some money in a home.

Post # 15
Member
1398 posts
Bumble bee
  • Wedding: May 2012

We’ve looked into a few different loans. Most require 3.5% down, some 10%. If your credit is really good, you may be able to qualify for something like this. It doesn’t hurt to research it.

Post # 16
Member
1668 posts
Bumble bee
  • Wedding: March 2012

OP, I’m sure all of this is confusing!  Get the book!  It explains it all in plain language and allows you make the best the decision for your situation.  For me, a second mortgage to avoid PMI wasn’t favorable.  I wasn’t comfortable with having an adjustable rate. But only you can make these decisions for your personal preferences and situation.  Keep in mind there are additional expenses to buying a home aside from closing costs and down payment (all in the book).

ETA: For this second property, I went with an FHA loan, putting 3.5% down and seller paying 3% of the sales price towards closing.  This made the deal manageable for me. 

 

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