No money down home mortgage

It's possible to get a mortgage to buy your first home even if you haven't saved up a big down payment. Here's where to look.

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With home prices and mortgage rates as low as they are, a lot of people are considering becoming first-time homebuyers. Unfortunately, many of them are discouraged by a perceived need to come up with a hefty down payment.

While the free-money days of the housing boom -- when virtually anyone could get a mortgage with little or no money down -- are long gone, there are still ways for qualified borrowers to get a mortgage with a small down payment. And qualifying may not be as difficult as you think. In fact, if you know where to look, it's still quite possible to get a mortgage with no money down.

Here's a look at the major options. Note that these options are not affected by the new mortgage rules issued by the Consumer Financial Protection Bureau on Jan. 10. Those rules set certain standards for borrowers' financial qualifications for getting a mortgage, but the size of the down payment was not among them.

FHA mortgage

The Federal Housing Administration is the first place most new homebuyers should look when contemplating a low-down-payment mortgage. The FHA requires a down payment of as little as 3.5% -- with attractive mortgage rates and credit requirements that are fairly generous as well.

The downside of an FHA mortgage is that the fees -- actually FHA mortgage insurance -- can add up. Currently, borrowers pay a one-time fee of 1.75% of the amount borrowed as an upfront mortgage insurance premium at the time they take out the loan. In addition, there's an annual insurance premium of 1.20% to 1.25% on 30-year mortgages.

So in the first year, you can end up paying nearly as much in mortgage insurance as you paid for a down payment. However, you can roll the cost of insurance into the loan, so you're paying it on a monthly basis over time, rather than having to come up with it all at once, as you would with a down payment.

Interest rates on FHA mortgages also tend to run a bit lower than those on conventional 30-year home loans, which helps balance out some of the cost of the insurance premiums. If you had a conventional mortgage with a down payment of 5% to 10%, you'd still have to pay private mortgage insurance annual premiums of 0.78% to 0.90% of your loan amount, so the difference isn't as great as it might first appear.


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Buying a home with 67% down & no credit history

2011-04-16 12:26:09 by -

I inherited $80k and I'm interested in buying a $119k house that is only 7 years old.
While I owe nobody a single dime, I have never borrowed any money from a lender.
The mortgage payments should be in the $300/month neighborhood which is well within my means.
What is the likelihood that a lender would make this loan?
Here is the house:


Two people splitting home down pmt only?

2013-06-29 07:12:45 by CLisDaBest

I wonder if this is common at all....for one party to want to buy a home, and another party splits the down payment with them (not only to help party # 1 wiht the down payment, but as an 'investment' for themselves also). Other than that, the first party more or less 'owns' the house handling any tenants, mortgage payments, repairs etc.
Is there then a formula that a good accountant could use, should party # 1 decide they want their money returned or party # 2 decides they want sell, to figure out who gets how much back based on how much time has passed, etc.
Or would there be no real way to calculate this and essentially party # 1 would just get back exactly what they contributed to the down pmt

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