Mortgage help

I do not currently own and never have. I don't have a down payment saved due to getting a late financial start in life. We missed any opportunity to buy before prices went off the chart, and the cost of living in our area is so high that I never wanted to buy a home here anyway. To me, that would be us being part of or adding to the problem of ridiculously overpriced homes in this area.

However, in this buyers' market, I can't help feeling that we may be sorry if we don't buy something. I have excellent credit, but I have heard that without a down payment, 20% minimum nowadays, I don't stand a chance of getting a loan. The market downturn has sort of skimmed over my town, though the prices have come down some.

I really want to buy property; I am sick to death of renting and throwing away my money--lots of it. I don't have any family members from which to borrow the downpayment or ask for any other type of assistance. Any suggestions?

I should say that we really don't want to live in this area once my son graduates from HS in a couple of years. My real question is: Is there good financing available for those of us without downpayments?
OK, I admit it.....I'm an alias! I wasn't born with the name Honeycurls!
Dood, get over it; there's no time limit on lurking.

I so busy runnin' allllllll over the place and ain't nobody chasin' me!
It's my understanding that you can't borrow your down payment, that it must be yours. I believe you can get up to a certain amount as a gift, and also if you can borrow money (from a family member or something of the sort) that will appear to the bank as a gift, and not a loan, then you could probably make that work.

It's also my understanding that these day, you're pretty much SOL unless you have a down payment. You may not need a full 20%, but you'll probably need at least 5 or 10%.

All of that said, if you don't plan on staying put for more than a few years, it's probably not worth it to buy. What I was told a few times while we were buying was that if you knew you weren't going to stay in your house for at least 5 years, then you'll probably end up losing money anyhow, given closing costs and moving costs and spending money on a real estate agent to then sell the place for you in a couple of years.

As much of a buyer's market as it is right now, I don't think you're in the right place to be doing so right now. From what you've said here, anyhow. If you're seriously interested, though, talk to your bank (or any bank) and see what kind of options there are for mortgages for your specific circumstances. Getting a quote is free.
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there are some organizations/programs out there for first-time homeowners. i think there was a thread about this this week, you might want to do a search.

one organization is NACA. there are certain restrictions, on where and how much you can buy. they're an activist organization and they are controversial, though. i have a friend who worked for freddie mae and she hates them. but i know people who have successfully and happily purchased homes through them:

General Information
NACA provides everyone with one mortgage product, which is the best one available anywhere with No downpayment, No closing costs, No fees, at a below market fixed rate and you do not need perfect credit. NACA is unique in that we counsel everyone into this one incredible product which makes homeownership affordable. We are committed to counsel all prospective homebuyers until they succeed in purchasing an affordable home.

NACA provides free, personalized, and comprehensive counseling to all Members to address your particular credit and financial issues and help determine a mortgage payment you can afford. NACA’s counseling and underwriting criteria are “character-based” and not based on credit scores and ratios. This enables us to fulfill our mission of assisting working people who otherwise do not have access to affordable credit. Consequently, the vast majority of NACA Members are low- to moderate-income many of whom have neither perfect credit nor substantial savings.
https://www.naca.com/index_main.jsp
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All of that said, if you don't plan on staying put for more than a few years, it's probably not worth it to buy. What I was told a few times while we were buying was that if you knew you weren't going to stay in your house for at least 5 years, then you'll probably end up losing money anyhow, given closing costs and moving costs and spending money on a real estate agent to then sell the place for you in a couple of years.

As much of a buyer's market as it is right now, I don't think you're in the right place to be doing so right now. From what you've said here, anyhow. If you're seriously interested, though, talk to your bank (or any bank) and see what kind of options there are for mortgages for your specific circumstances. Getting a quote is free.
Originally Posted by MichelleBFT
I have to agree with this. Based on what you've written it just doesn't sound like the right time for you to buy a home. Would it be that bad to wait until your son graduates? I know you want to take advantage of the buyer's market, but you don't want to end up being stuck living somewhere you don't like (I'm kind of in that situation now, and it really, really sucks).

FWIW, I purchased my place with only 5% down. That was 1 1/2 yrs ago, I have no idea what banks are offering these days.
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i skimmed over the part about not wanting to live there in a couple of years. better to wait, then.
3B corkscrews with scatterings of 3A & 3C.
i skimmed over the part about not wanting to live there in a couple of years. better to wait, then.
Originally Posted by journotraveler
I agree. I would not buy unless I thought I could live in the house at least 5 years. Otherwise, you will probably lose any money you have invested.

If this doesn't faze you and you still want to own a home, you can still find programs (e.g. FHA) that you might qualify for. Loans are more widely available for single family homes, rather than condos and townhouses; so if you're thinking about a condo, you might have problems.

You can benefit from some government incentives with the economic stimulus package that are pretty nice. I would wait until banks have an opportunity to implement what recently passed (4/1 probably) before talking to a loan officer.

ETA: I deleted some stuff that Michelle already said.
never mind

Last edited by ruralcurls; 03-05-2009 at 03:55 PM.
I should have clarified that while I don't want to buy a home here, I would like to buy a home in the area we would like to move to in a few years, which we haven't decided upon yet.

My major concern is not having a downpayment. I was hoping we had some mortgage brokers or other lending industry pros here who might know more in-depth info.

Five, even two years ago, anyone who could fog a mirror could buy a house without a downpayment, but that has all changed--and well it should have. I remember looking at a house about 3 years ago, and they were willing to give me any amount of money I wanted, whether or not I could prove that I could afford it or not and without a downpayment. Fortunately, we saw that for what it really was and told them to keep their money.

ETA: I'm still not quite expressing myself...what I mean is that we want to buy a house NOW to take advantage of the low prices, but we want to buy it in a different area. We could buy an entire estate somewhere else for what we could literally buy a cottage for here. And that's no exaggeration.
OK, I admit it.....I'm an alias! I wasn't born with the name Honeycurls!
Dood, get over it; there's no time limit on lurking.

I so busy runnin' allllllll over the place and ain't nobody chasin' me!

Last edited by Honeycurls; 03-05-2009 at 03:37 PM.
I should have clarified that while I don't want to buy a home here, I would like to buy a home in the area we would like to move to in a few years, which we haven't decided upon yet.

My major concern is not having a downpayment. I was hoping we had some mortgage brokers or other lending industry pros here who might know more in-depth info.

Five, even two years ago, anyone who could fog a mirror could buy a house without a downpayment, but that has all changed--and well it should have. I remember looking at a house about 3 years ago, and they were willing to give me any amount of money I wanted, whether or not I could prove that I could afford it or not and without a downpayment. Fortunately, we saw that for what it really was and told them to keep their money.
Originally Posted by Honeycurls
I am in the industry. Are you asking if you can buy now in a city that you don't live in or are you asking if a couple years from now you will be able to buy a house without a downpayment?

Last edited by mrspoppers; 03-05-2009 at 03:45 PM.
I just saw what you added. The answer is no. You will not be able to buy a house in a place where you don't live. All programs that are available now are for people who are buying homes to be their permanent residences. Investment homes require significant down payments (much more than 20%) and do not qualify for any government assistance.
Well, if you are not moving for a few years could you start saving for a down payment? And who knows what the situation will be like in a few years. It may be a little easier to get a loan.

I think you should talk to someone in person, or at least over the phone who can go over your records with you and let you know what you need to do. They should be able to point you in the right direction.
I think we posted at the same time. I edited my above post in a way that would answer your question.

I don't think I implied that anyone was talking out of their ass....ah...nc.com never disappoints.

That said, I do think that info from 5 years ago is certainly not going to apply to today's market, but I still appreciate your input, ruralcurls.
OK, I admit it.....I'm an alias! I wasn't born with the name Honeycurls!
Dood, get over it; there's no time limit on lurking.

I so busy runnin' allllllll over the place and ain't nobody chasin' me!
Well, if you are not moving for a few years could you start saving for a down payment? And who knows what the situation will be like in a few years. It may be a little easier to get a loan.

I think you should talk to someone in person, or at least over the phone who can go over your records with you and let you know what you need to do. They should be able to point you in the right direction.
Originally Posted by ruralcurls
I think you're right. I don't think I'll have any trouble securing a loan, I just don't know if I can save up much of a downpayment with my son coming up on his college years. Should've pulled my head outta my butt a lot earlier in life. ::sigh::
OK, I admit it.....I'm an alias! I wasn't born with the name Honeycurls!
Dood, get over it; there's no time limit on lurking.

I so busy runnin' allllllll over the place and ain't nobody chasin' me!
Umm, never mind.

Last edited by ruralcurls; 03-05-2009 at 03:50 PM.
I think we posted at the same time. I edited my above post in a way that would answer your question.

I don't think I implied that anyone was talking out of their ass....ah...nc.com never disappoints.

That said, I do think that info from 5 years ago is certainly not going to apply to today's market, but I still appreciate your input, ruralcurls.
Originally Posted by Honeycurls
I also edited my post. That was rude of me.

If I were you, I would start putting the money that you think you could spend on a mortgage payment now into a Roth IRA. Then when you know where you want to move or lending parameters loosen up (which is just a pipe dream at this point) you will be ready to buy.
I think we posted at the same time. I edited my above post in a way that would answer your question.

I don't think I implied that anyone was talking out of their ass....ah...nc.com never disappoints.

That said, I do think that info from 5 years ago is certainly not going to apply to today's market, but I still appreciate your input, ruralcurls.
Originally Posted by Honeycurls
I also edited my post. That was rude of me.

If I were you, I would start putting the money that you think you could spend on a mortgage payment now into a Roth IRA. Then when you know where you want to move or lending parameters loosen up (which is just a pipe dream at this point) you will be ready to buy.
Originally Posted by mrspoppers
That actually sounds like a great idea. I was thinking about a Roth IRA anyway, but I know most of it will probably go for son's education. Well, if it turns out that we won't ever be able to buy a home, I guess the bright side is that it will serve as a great financial lesson for my son that touches on some important things you shouldn'tdo as a young adult and why.
OK, I admit it.....I'm an alias! I wasn't born with the name Honeycurls!
Dood, get over it; there's no time limit on lurking.

I so busy runnin' allllllll over the place and ain't nobody chasin' me!
Do you qualify for an FHA loan? I don't think FHA is only in MI, but I could be wrong. You put down 3.5%. And you just have to make sure the house passes FHA inspection. Basically, if it passes a regular inspection, FHA will take it. (We had to cover a drain in the basement and fix the electrical stuff, which the seller did- basic safety issues). Hope it helps.
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There is a tax credit available for qualifying first time homebuyers for houses purchased until December 1, 2009 of $8000.

HTML Code:
http://www.federalhousingtaxcredit.com/2009/faq.php
Kg and Macluan, the problem is that if Honeycurls buys a home now, it will not be her primary residence and those programs do not apply to people who are buying investment properties. You would not believe the documentation that is now required in order to prove a home will be your primary residence if there is any red flag that pops up in underwriting. One such red flag is if your job is located more than a certain distance from your home.
You really shouldn't buy a house without a substantial down payment. That's how we got into our current mess...people borrowing 100% of their house cost and then having zero or negative equity when prices drop.

There might be some upcoming tax credits or rebates with the stimulus package that might help you buy a home. However, I still don't think it's smart to buy with no money, no matter what incentives are out there.

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