(Closed) Is it EVER ok to put zero or less than $5k down on a house?

posted 6 years ago in Home
  • poll: Would you ever buy a house with zero down if it meant your monthly payment would be lower than rent?
    Yes! In a heartbeat. When we save more, we'll pay down some of the mortgage : (54 votes)
    38 %
    I'd want to put at least $5k down, but would be comfortable doing just that : (20 votes)
    14 %
    NO WAY! That's a great way to get foreclosed on later. : (62 votes)
    43 %
    Other : (7 votes)
    5 %
  • Post # 3
    Member
    2373 posts
    Buzzing bee
    • Wedding: July 2008

    In my opinion, it’s up to you. We put zero down on our condo and our mortgage is less than rent.

    Edit: We have a VA loan, they don’t require anything down and our interest rate is low.

    Post # 3
    Hostess
    18643 posts
    Honey Beekeeper
    • Wedding: June 2009

    I really don’t like the idea of taking out a mortgage with no money.  Unless you are in a rural area, you probably won’t get a lender to give you a mortgage with little or no down and a lot don’t have the 80/20 mortgages anymore (not that I think having 2 mortgages from day 1 is a good idea).  Do you guys have any savings at all? Buying a home costs more than the downpayment, you have thousands in closing costs plus additional bills, home decorating, etc.

    Post # 4
    Member
    180 posts
    Blushing bee
    • Wedding: August 2010

    There are very few (if any) loans out there these days that will allow you to put zero percent down. Unless you or your husband is a vetern and can apply for a VA loan, the best you can probably do is an FHA loan, which requires 3.5% down. Before you start looking at houses I suggest you speak witha  mortgage professional/lender.

    Post # 5
    Member
    1183 posts
    Bumble bee
    • Wedding: April 2012

    I only put like 3.5% down because I did the first time home buyer FHA loan and got the $8k credit, so then it was like I was getting all my money back.

    It was TOTALLY worth it for me. My mortgage is cheaper than my rent ever was! 

    Post # 7
    Member
    5475 posts
    Bee Keeper
    • Wedding: August 2012

    We didn’t put any down, but we also have a VA loan.  Other factors we considered: if the list price was anywhere near what it was appraised for (the sellers needed to get rid of it, so we paid about 10k under appraisal, so we had immediate equity), we also plan to be in the house for at least 5 years (time for the market to bounce back before we try to sell, and it’s 3 bed/2.5 bath so we CAN stay there longer if needed), and we also wanted to make sure that our mortgage + escrow + other bills would still leave us enough room to add in an additional $100 a month toward the principle.

    After one year in our house, I have made what amounts to two entire monthly payments paid directly to the principle, and we are a month ahead on our payments. 

    It depends on the situation as to whether or not you need to make a big down payment.  We didn’t, and we don’t regret it.

    Post # 8
    Member
    258 posts
    Helper bee
    • Wedding: November 2011

    I know banks in our area(Boston) won’t generally approve you unless you can put a minimum of 10% down, and often require a minimum of 20%.  But if you have the income, they may consider you less of a risk. 

    For me, I would be more worried about actually getting approval than my personal feelings about how much was down.  I would talk to a few of your local banks to see if you qualify.  If you do qualify, and you’re sure this is the place you want to live in and call your own, go for it!

    Post # 9
    Hostess
    18643 posts
    Honey Beekeeper
    • Wedding: June 2009

    Are you sure you won’t have to move after graduation?  My husband and I own a house in CO that we are renting because he couldn’t find a job after graduating.  Guess it depends on how stable your job prospects are whether you should consider buying now or not.

    Post # 9
    Member
    5296 posts
    Bee Keeper
    • Wedding: January 1993

    I wouldn’t be comfortable with it. Darling Husband and I hope to have 20% or more.

    Post # 10
    Member
    2695 posts
    Sugar bee
    • Wedding: February 2008

    I think the problem with no down payment is that it could indicate something about the owner’s ability to maintain the home and mortgage.  If your path over the next 5-10 years makes you feel very comfortable about being able to keep up with your mortgage, it should be ok.   Also keep in mind if there are a lot of homes for sale cheap, what that could mean for resale – are you likely to move in the next X years? Its all about being financially responsible, and I don’t think the $$ for a downpayment on its own tells the whole story.

    Post # 11
    Member
    13099 posts
    Honey Beekeeper
    • Wedding: July 2010

    I believe people used to be able to get a loan without a downpayment but with the current economy / housing crisis, I’m pretty sure that option is no longer available.

    Even if it was, personally I don’t think it is at all smart to buy a house if you haven’t been able to save enough money for a down payment.  Houses come with lots of surprise costs and you have to be able to have a savings fund available for when the HVAC unit quits, the fridge gives out or the roof starts leaking.  If you have no money for a down-payment then you also don’t liekly have enough money to be prepared for the expenses that go along with owning a home.

    The best you’d probably be able to do if an FHA loan which would require 3.5% down but you also need money for escrow, closing costs, etc.

    Post # 12
    Member
    2442 posts
    Buzzing bee
    • Wedding: April 2011

    Ideally all buyers would plunk down a huge down payment whenever buying a home.  Obviously, everyone can’t/doesn’t do that.  You have to do what is best for you at this time in your life.  I’ve purchased 5 homes in my lifetime so far, some with a big down payment and my current home with no down payment at all (after my huge financially gruesome divorce), and my suggestion is to be more concerned with the monthly payment and do not get an ARM under any circumstances!  

    Post # 13
    Member
    2695 posts
    Sugar bee
    • Wedding: February 2008

    @2ndtime:  Disagree.  ARMs make a lot of sense in specific circumstances (e.g., you plan to be in your home for a shorter duration of time than the ARM).

    Post # 14
    Member
    258 posts
    Helper bee
    • Wedding: November 2011

    I agree with what some others have pointed out about additional costs.

    You may be able to make the mortgage payments, but there are also property taxes, water and sewage bill, homeowners insurance, general repairs(roof, appliances, broken water pipe, driveway maintence, water damage, etc.)

    Plus, if you get pregnant along the way, that an additional huge expense and may even cut into income slightly.  Also, even with health insurace, if, goodness forbid something happen to either of you, that can eat away at your disposable income as well.

    While I think if you love the house and are sure it is the one, you should go for it… personally, I would save up more first.  But maybe because I don’t like to commit myself to added responsibility and obligation if I can help it. Renting, in my opinion, is so much cheaper than owning.  Someone else is responsible for paying for all the problems and maintence and taxes and hoeowners insurance.  I would just worry about being stretched too thin.

    Without putting anything down(if you can get approved for that these days) you might end up paying double the price of the house on the interest in the long run.  Having more savings can help save on those interest costs.  There are plenty of houses on the market and new ones come up all the time.  You might want to become a little more financially secure so that if you do buy, and then you have some unforeseen large expense, you can handle it.

    But again, if this is the house you love, then you might aw well apply for the loan and see.  Personally, I would only apply for a fixed rate, but that’s because it sounds like you plan to live there for a long time.  I’m under the impression ARM loans are more for when you plan to flip the house in the next 5 years.

    The topic ‘Is it EVER ok to put zero or less than $5k down on a house?’ is closed to new replies.

    Find Amazing Vendors