Quote:
Originally posted by griphiam
Is it possible to buy a apartment/house with no money down? I understand the more you can put down the better, because its less in interest over time.
We're looking to be in the area about 2 to 2.5 years, and have been renting the past 9 months and would rather put that rent money into our own place. Is this a good idea?
Can I take what I currently pay in rent per month and translate that into what price range I can afford?
Thanks!
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I bought a house 6 months ago. I had absolutely no money to put down on a house...but I had terrific credit.
I received an 80/20 loan. Lets say you want a 100k home. Your first mortgage would be for 80% or 80k and then they put together a 'home equity line of credit' for the other 20% or 20k. The great thing about that was that I did not have to pay PMI !! Because they used that 20% line of credit towards the down payment (sorry, I really don't know the lingo)
FYI - The loan officer advised me that I needed at least a 680 credit score for an 80/20. Go to myfico.com and check your scores.
I asked the sellers to pay 3% of my closing costs, which usually covers it all. I did have to come up with the earnest money for the contract... but at closing I received all of my earnest money back minus 13.50! Yep, I bought my home for 13.50 out of pocket money.
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As far as only having your home for 2.5 years. I believe you need to own it for at least two years before there are tax implications involved... Check with your tax man.
In 6 months of owning my home, I have seen other comparable homes in my neighborhood selling for 50 to 60k over what I paid for (whew, hope it keeps going)
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Also, I know there are programs available for 103% to 107%. Meaning loans will be for 3 to 7% above the loan, for repairs and what not, just realize by taking these kinds of loans that you will be paying PMI (private mortgage insurance) due to not putting 20% down. This will raise your payments substantially.
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There are tons of 'mortgage calculators' on the net, do a google search, to see what you can afford. They are usually pretty realistic. Be careful and stick with your budget. My loan officer advised me I could buy up to this rediculous number (which I know I could definitely not afford)
I am certainly no expert, but I did do my research ;-)