I know it's possible, but what are the out of pocket expenses? A friend and I were talking about this, maybe get an investment property or something in a vacation place together. I know closing costs are separate, but once you get approved by mortgage company are there any hidden fees that you will need.
Can you really buy a house with 0 down?
- Thread starter Liviathan
- Start date
Demon-Xanth
Lifer
- Feb 15, 2000
- 20,551
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Yep. Went through the approval process and all that before deciding that there is no way in hell I can afford a house. (even a beater) They were all set to loan me about $350,000 w/ $0 down. I couldn't pay it back though. Even an all ramen diet and an excercycle generator wasn't going to be enough.
I did a $0.00 down payment loan in Sept. 2003. We negotiated to have the sellers pay $2500.00 in closing costs, the only money we ever had to pay was the Earnest Money which was $1000.00 paid at the time when our offer on the house was accepted. We did get 900+ dollars of that back because our total closing costs were more like $2600.00. The only thing to be careful is having no equity in the house locks you into it for a while.
Yes, you can buy a house with literally $0 out of pocket at closing.
Some banks will not only offer a 0% down home loan, but will also offer to include all closing costs into the loan as well. However, I would not go that route-- they usually charge a premium on the interest rate and will have a fairly hefty pre-payment penalty.
Just get your typical no-down payment home loan (actually, it's likely to be two loans: one at 80% of the home's price, and the other at 20%)... but when you negotiate the sales price get the seller to pay the closing costs.
Some banks will not only offer a 0% down home loan, but will also offer to include all closing costs into the loan as well. However, I would not go that route-- they usually charge a premium on the interest rate and will have a fairly hefty pre-payment penalty.
Just get your typical no-down payment home loan (actually, it's likely to be two loans: one at 80% of the home's price, and the other at 20%)... but when you negotiate the sales price get the seller to pay the closing costs.
I walked out of closing with a check for around $350 going with a FHA laon. My house was $42k and they gave me a $39k loan and another loan for $5k to cover a 5% downpayment and closing cost. What was left over I took home and used to make my first house payment.
Yes...many lenders will do 100% financing.
Then if you really want to keep your out of pocket have the seller pay your closings costs.
Lets say you and the seller agree on $200,000....
Once the deal is solidified and the appraisal and inspection is out of the way go back to the seller and offer them $204,000 and amend the purchase contract for them to pay up to $4000 in closing costs.
You're ultimately paying it back anyway but at 6.5% P&I it would add $27/month to your payment.
Then if you really want to keep your out of pocket have the seller pay your closings costs.
Lets say you and the seller agree on $200,000....
Once the deal is solidified and the appraisal and inspection is out of the way go back to the seller and offer them $204,000 and amend the purchase contract for them to pay up to $4000 in closing costs.
You're ultimately paying it back anyway but at 6.5% P&I it would add $27/month to your payment.
Yes, but I believe your annual income would have to be above a certain level depending on how big the loan is before they approve you.
We are keeping the place longer than that, he is going to live there for at least that amount of time.
Yes but you are going to pay for it in the end! I imagine your interest rate will be a few points higher than the going rate and you will probably have to pay mortgage insurance out the butt.
Preyhunter
Golden Member
- Nov 9, 1999
- 1,774
- 12
- 81
If I was the seller it would have to be $204,240 because of the 6% cut of that $4000 that the realtor is gonna take on the higher price.
As someone who has been actively involved in real estate for the past 15 years, I can tell you from experience there are pros and cons to 100% financing.
First of all, yes, it is available. But you need to be wary of a decline in prices after you buy. Many times, the homeowner finds themselves upside down: owing more than the house is worth. And people always say, "Oh, hell, prices are rising. We've got nothing to worry about". Well, history, and recent history at that, will show you the errors of your thinking. Markets rise and fall all the time. And recently we are beginning to see an increase in foreclosures as these 100% loans, and adjustable rate loans begin to bite back.
Bottom line: do your research, and have a Plan B for when the unexpected happens.
First of all, yes, it is available. But you need to be wary of a decline in prices after you buy. Many times, the homeowner finds themselves upside down: owing more than the house is worth. And people always say, "Oh, hell, prices are rising. We've got nothing to worry about". Well, history, and recent history at that, will show you the errors of your thinking. Markets rise and fall all the time. And recently we are beginning to see an increase in foreclosures as these 100% loans, and adjustable rate loans begin to bite back.
Bottom line: do your research, and have a Plan B for when the unexpected happens.
Waste of money. Homes are a liability not an asset, especially with that kind of loan. If he just wants to live somewhere for up to a year he should just rent.
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