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mitabtrfly
Member since 12/06 2770 total posts
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For those who purchased a home with no money down...
do you find it hard to manage?
DH and I make great money and we want to get a house. We also are looking into getting a new car as well because it's needed since he works nights and I need a car to get around. We started the paperwork for our loan for the house and were approved @ 100% financing, but now he's worrying if we will be able to afford it. We both get a lot of overtime as well which helps out even more!
My living situation in our current apartment has not changed at all, and I want to move like YESTERDAY! I didn't want to move into another apartment..but if we have to..then so be it. I just do not want to stay living here.
I just have the feeling he's thinking of staying here longer. However, I am not going to stay here and deal with the crap we have been dealing with any longer. Unfortunately this is the situation...we need a car bad, and we also need to move from this apartment BADLY. If we can't get the house now..then it will have to wait, but we will have to start looking now for an apartment and get the car.
Any input is appreciated...TIA!
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Posted 10/2/07 4:05 PM  |
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Prudential Douglas Elliman Real Estate
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alnem
This is gonna be a good year!
Member since 2/06 9562 total posts
Name:
Emily
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Re: For those who purchased a home with no money down...
just keep in mind that 100% financing doesnt mean 100% financing. you'll need money to hold in escrow when you sign the contracts (which is held by the sellers attorney)...usually 5% is the minimum accepted. also dont forget to factor in your closing costs which is anywhere from 3-6% of the agreed on sale price. so you'll need cash liquid before you can venture into the buying process. alot of mortgage people forget to mention that.
good luck!
Message edited 10/2/2007 4:11:35 PM.
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| Posted 10/2/07 4:10 PM |
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HoneyBadger
YourWorstNightmare.
Member since 10/06 15979 total posts
Name:
BahBahBlackJeep
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Re: For those who purchased a home with no money down...
Posted by mitabtrfly
do you find it hard to manage?
DH and I make great money and we want to get a house. We also are looking into getting a new car as well because it's needed since he works nights and I need a car to get around. We started the paperwork for our loan for the house and were approved @ 100% financing, but now he's worrying if we will be able to afford it. We both get a lot of overtime as well which helps out even more!
My living situation in our current apartment has not changed at all, and I want to move like YESTERDAY! I didn't want to move into another apartment..but if we have to..then so be it. I just do not want to stay living here.
I just have the feeling he's thinking of staying here longer. However, I am not going to stay here and deal with the crap we have been dealing with any longer. Unfortunately this is the situation...we need a car bad, and we also need to move from this apartment BADLY. If we can't get the house now..then it will have to wait, but we will have to start looking now for an apartment and get the car.
Any input is appreciated...TIA!
We financed 100% of the cost of our home and I don't think it's more difficult to manage.
We figured out, as we would have with any kind of mortgage we got, how much the payment was going to be per month including estimates for our utilities plus other monthly spending like gas and groceries and it was within our price range.
Financing 100% for us was the best option b/c at the same time we were paying for our wedding so it made the most sense and got us into a home we could afford w/o having to have the downpayment.
We did, however, have the 22K in cash to cover all our closing costs.
I think if you really figure out the numbers and what you will need to come up with per month and it's what you can afford, you'll be fine.
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| Posted 10/2/07 4:21 PM |
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Kara
Now Zagat Rated!
Member since 3/07 13217 total posts
Name:
They call me "Tater Salad"
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Re: For those who purchased a home with no money down...
If I'm being completely honest, I'd find another apartment and wait until you have the cash for a parital downpayment. Your closing costs will still be 3-6% of the purchase price, so you need cash anyway. Additionally, you'll be much more limited in what you can comfortably afford. (The "2 - 2.5x your income" rule assumes a 20% down payment) You'll also have to escrow your tax and insurance money b/c NO lender is going to waive escrow on 100% financing for a first-time homebuyer. That can be up to 10 months for each, depending on your lender -- and you're unlikely to know the exact amount until just before closing. Also, often with 100% financing, the lender will expect you to have a certain amount of cash in the bank AFTER closing - at least enough to cover your mortgage / taxes for a couple of months...
If your salaries are that healthy, then you should be able to rent someplace affordable (but without the drama at your current place) and save for a house within a year or two. I think it would be a better idea financially to put at least 10% down so you're SURE you can afford it and possibly buy something you're more likely stay in longer-term.
That said, this is just MHO. Many people get 100% financing and are just fine... just DON'T buy without crunching the numbers first (and over and over and over again so you're sure you're right). You need to leave wiggle room for savings, the increased cost of utilities (Much higher in a house than an apartment...), and those unexpected expenses that go along with home ownership. Even with our downpayment we bought well below our means b/c we'd rather save richly than spend richly... and taxes are sky high around here.
Good luck - I know you're anxious to get out of where you are living -- but don't make a hasty financial decision just b/c you're dying to leave. Why not try moving somewhere with a six-month lease and at least get away from the drama for a while before deciding? Just a thought.
GOOD LUCK whatever you decide!
ETA - and I'm not saying 100% financing is a bad idea for everyone -- I'm just saying it's not necessarily a good idea for everyone. Homeownership is expensive and a huge financial undertaking -- just make sure you crunch the numbers so you know what you can truly afford comfortably.
I know we were approved for way more than we wanted to spend (and could comfortably afford). I think a big thing with 100% financing is to make sure you buy beneath what you could afford with a 10-20% downpayment to compensate for the higher monthly payments.
GOOD LUCK!
And one more ETA -- Is your overtime guaranteed? Will you ALWAYS get it no matter what? If not, consider it a bonus and don't factor that into your salary for the purposes of making sure you can afford all your bills + save some. Just a thought...
Message edited 10/2/2007 4:28:48 PM.
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| Posted 10/2/07 4:24 PM |
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BlueDiamonds
mommy to 3 boys
Member since 2/07 3885 total posts
Name:
proud mommy
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Re: For those who purchased a home with no money down...
I recommend that you talk with a professional about this. It sounds like you really want to get into a house and they can help you do that. Before we buy a house, we plan to get some mortgage advice from LIHP first. They can help you crunch the numbers to see what you can afford and maybe see if you qualify for some assistance.
For us, we would rather save more $ and not do 100% financing. It's do-able, you just can't afford as much house b/c you will have a larger amount mortgaged and your interest rate won't be as low. Start saving now for closing costs and $ for after you close.
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| Posted 10/2/07 5:05 PM |
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MrsPowers
So blessed!
Member since 11/06 10348 total posts
Name:
Ivelysse
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Re: For those who purchased a home with no money down...
It is very difficult to get a 100% mortgage today. My friend is going through this right now and most banks do not do it. THere has been a lot of change in the mortgage industry in the past few months. I would try to have something to put down rather than finance 100%. Sorry to give you bad news but I wanted to be honest. my friend is not happy right now.
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| Posted 10/2/07 5:26 PM |
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CurlyQ
Member since 6/07 2024 total posts
Name:
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Re: For those who purchased a home with no money down...
I was just watching the news and heard that no money down loans are no longer an option. I know their are other ways, but I think with the state of the morgage companies right now it maybe a lot harder than it was.
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| Posted 10/2/07 6:17 PM |
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leese
Sarge!
Member since 5/05 1965 total posts
Name:
Leese
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Re: For those who purchased a home with no money down...
Posted by MrsPowers
It is very difficult to get a 100% mortgage today. My friend is going through this right now and most banks do not do it. THere has been a lot of change in the mortgage industry in the past few months. I would try to have something to put down rather than finance 100%. Sorry to give you bad news but I wanted to be honest. my friend is not happy right now.
This is very true. It's just not going to happen as it had in the past.
You should talk to a mortgage person at your local bank or other insitiution to learn if you are able to do it first.
If not, look for a new ap.t
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| Posted 10/2/07 6:37 PM |
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mitabtrfly
Member since 12/06 2770 total posts
Name:
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Re: For those who purchased a home with no money down...
Posted by Kara
If I'm being completely honest, I'd find another apartment and wait until you have the cash for a parital downpayment. Your closing costs will still be 3-6% of the purchase price, so you need cash anyway. Additionally, you'll be much more limited in what you can comfortably afford. (The "2 - 2.5x your income" rule assumes a 20% down payment) You'll also have to escrow your tax and insurance money b/c NO lender is going to waive escrow on 100% financing for a first-time homebuyer. That can be up to 10 months for each, depending on your lender -- and you're unlikely to know the exact amount until just before closing. Also, often with 100% financing, the lender will expect you to have a certain amount of cash in the bank AFTER closing - at least enough to cover your mortgage / taxes for a couple of months...
If your salaries are that healthy, then you should be able to rent someplace affordable (but without the drama at your current place) and save for a house within a year or two. I think it would be a better idea financially to put at least 10% down so you're SURE you can afford it and possibly buy something you're more likely stay in longer-term.
That said, this is just MHO. Many people get 100% financing and are just fine... just DON'T buy without crunching the numbers first (and over and over and over again so you're sure you're right). You need to leave wiggle room for savings, the increased cost of utilities (Much higher in a house than an apartment...), and those unexpected expenses that go along with home ownership. Even with our downpayment we bought well below our means b/c we'd rather save richly than spend richly... and taxes are sky high around here.
Good luck - I know you're anxious to get out of where you are living -- but don't make a hasty financial decision just b/c you're dying to leave. Why not try moving somewhere with a six-month lease and at least get away from the drama for a while before deciding? Just a thought.
GOOD LUCK whatever you decide!
ETA - and I'm not saying 100% financing is a bad idea for everyone -- I'm just saying it's not necessarily a good idea for everyone. Homeownership is expensive and a huge financial undertaking -- just make sure you crunch the numbers so you know what you can truly afford comfortably.
I know we were approved for way more than we wanted to spend (and could comfortably afford). I think a big thing with 100% financing is to make sure you buy beneath what you could afford with a 10-20% downpayment to compensate for the higher monthly payments.
GOOD LUCK!
And one more ETA -- Is your overtime guaranteed? Will you ALWAYS get it no matter what? If not, consider it a bonus and don't factor that into your salary for the purposes of making sure you can afford all your bills + save some. Just a thought...
Thanks!!!!!!
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| Posted 10/2/07 6:42 PM |
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Salason
♥
Member since 6/05 9878 total posts
Name:
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Re: For those who purchased a home with no money down...
Posted by leese
Posted by MrsPowers
It is very difficult to get a 100% mortgage today. My friend is going through this right now and most banks do not do it. THere has been a lot of change in the mortgage industry in the past few months. I would try to have something to put down rather than finance 100%. Sorry to give you bad news but I wanted to be honest. my friend is not happy right now.
This is very true. It's just not going to happen as it had in the past.
You should talk to a mortgage person at your local bank or other insitiution to learn if you are able to do it first.
If not, look for a new ap.t
ITA. The industry is changing week to week and there are stories about buyers getting to closing and the mortgage company not funding (a lot of them are going under).
Also, not only will you start with no equity, you'll actually have negative equity rather quickly as home prices continue to deteriorate. That means if you ever needed to sell, you'd be under water.
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| Posted 10/2/07 6:59 PM |
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nov04libride
big brother <3
Member since 5/05 14672 total posts
Name:
Me
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Re: For those who purchased a home with no money down...
Posted by Kara
If your salaries are that healthy, then you should be able to rent someplace affordable (but without the drama at your current place) and save for a house within a year or two. I think it would be a better idea financially to put at least 10% down so you're SURE you can afford it and possibly buy something you're more likely stay in longer-term.
That said, this is just MHO. Many people get 100% financing and are just fine... just DON'T buy without crunching the numbers first (and over and over and over again so you're sure you're right). You need to leave wiggle room for savings, the increased cost of utilities (Much higher in a house than an apartment...), and those unexpected expenses that go along with home ownership. Even with our downpayment we bought well below our means b/c we'd rather save richly than spend richly... and taxes are sky high around here.
Good luck - I know you're anxious to get out of where you are living -- but don't make a hasty financial decision just b/c you're dying to leave. Why not try moving somewhere with a six-month lease and at least get away from the drama for a while before deciding? Just a thought.
ITA with this advice. If the salaries are that good, I would save up and not put yourself in that position. I would at least want $30,000 to cover closing costs and any necessities and to have a slight cushion.
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| Posted 10/2/07 7:10 PM |
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
Name:
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Re: For those who purchased a home with no money down...
DH and I did 100% financing. As others have said, it's not for everyone. We looked into a 5% down payment but when we crunched numbers, the 5% down didn't make much of a dent in our monthly payments (the sale price was lower than most LI homes) so for us, it made more sense to bank the extra money.
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| Posted 10/3/07 2:40 PM |
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SweetTooth
I'm a tired mommy!
Member since 12/05 20105 total posts
Name:
Lauren
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Re: For those who purchased a home with no money down...
Posted by RandJ0806
DH and I did 100% financing. As others have said, it's not for everyone. We looked into a 5% down payment but when we crunched numbers, the 5% down didn't make much of a dent in our monthly payments (the sale price was lower than most LI homes) so for us, it made more sense to bank the extra money.
Same for us. We had saved money to pay for closing costs and to renovate the house. we chose to use the money for that instead of a down payment. Now we do have equity because all the work we did raised the value of the house. Also we plan to be here for at least five years. We made sure we could afford the mortgage payment, including the escrowed money for taxes and insurance first.
Message edited 10/3/2007 2:48:44 PM.
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| Posted 10/3/07 2:48 PM |
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pinkandblue
Our family is complete, maybe
Member since 9/05 32436 total posts
Name:
Stephanie
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Re: For those who purchased a home with no money down...
we financed 100% of our home, the seller paid the closing costs. We had a minimal amount out of pocket and it worked fine for us, the only downside is that we pay some money each month for PMI, a total waste of money. But we did what we had to do  
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| Posted 10/3/07 8:32 PM |
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