FYI- You CAN and We just DID buy a house w/ ZERO DOWN!!

Hi all. I do not post often but have read soooo many posts on this site where everyone said you can't buy a house with 0% down and you pay higher interest and etc etc etc...well you can and none of that is true....

My DH and I just bought a house on LI for 420K and did 100% financing and also avoiding the PMI buying doing an 80/20 loan. AND got 5.5% on the 80 loan and 6.0 on the 20 loan. AND we also did sellers concession thus taking a mortgage out for 430K to cover some of out closing costs....in short, all we paid out of pocket was 5K in closing costs. THAT WAS IT!!!!

Yes, we have very good if not perfect credit but we did not have to pay any sort of other fees b/c we were doing 100% finance. Our issue was b/c I was in lawschool we didnt have lot of money saved but now that I am done my DH and I could afford a larger monthly payment but just didn't have the money down. So this worked for us.

So for all of those brides out there who think they CAN NEVER come up with these crazy downpayments-- dont sweat it...
all we needed was 5K for closing costs and then we gave the seller 10K to put in his escrow as 'binder money' that he just gave back to us at closing. This way the seller was secure by havng our 10K should we back out, but we didnt have to put it towards the house.
So, good luck

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Posted by cjb88

but is your morgage huge????

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that amout looks like a 2500 payment (w/o taxes)

the thing is if you put money down but not 20% down, you pay the PMI which is more then if you just take out a seperate loan.

Its recommened any extra money you have is to get rid of the 20% loan

Well, good for you. Whatever works....and whatever you need to do, right!

Congrats!!!!!

Where are you guys going to live?

I don't think anyone here ever said its impossible to buy something with 100% financing.

Doesn't mean its the smartest decision in the world. You are paying a TON more interest over the life of the loan.

You will be paying interest for 30 years on money you borrowed that didn't even cover the house itself (the closing costs).

But hey.... if it works for you then i guess thats fine.

Like Valery, we did nearly the same thing and just payed for closing costs. We got a thirty year fixed mortgage at 6% and two years after close we are already getting out PMI waived because of some improvements we made and the increase of real estate in our town.
It can be done!

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Posted by DjPiLL

I don't think anyone here ever said its impossible to buy something with 100% financing.

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People do it all the time.

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Posted by DjPiLL
Doesn't mean its the smartest decision in the world. You are paying a TON more interest over the life of the loan.

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How am I paying a ton more interest?

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Posted by DjPiLL
'You will be paying interest for 30 years on money you borrowed that didn't even cover the house itself (the closing costs).

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She said she paid for closing costs

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Posted by DjPiLL
'You will be paying interest for 30 years on money you borrowed that didn't even cover the house itself (the closing costs).

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She said she paid for closing costs

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She said she took out $430 to cover some of the closing costs.

But as far as taking out 100+% financing, whatever works. I don't remember anyone saying that it couldn't be done I just think most feel it's not a wise financial decision. Personally, if that's what works for you than that's great. Good luck with the new house!

Congrats!
But like others said, it's just not the wisest decision considering you are starting out with no equity and you have a tremendous mortgage.

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Posted by dkwife

Congrats!
But like others said, it's just not the wisest decision considering you are starting out with no equity and you have a tremendous mortgage.

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this is probally the only solution for those who cant put down 5, 10 or 20% down. A slightly larger payment may be managable now but to save for a down payment takes alot longer.

For us, its very wise instead of attempting to put money down, we would be paying insurance. Once they get established in there jobs, they will have more income to reduce the mortage and vaule on property will increase no matter what.

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Posted by MCDO15

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Posted by dkwife

Congrats!
But like others said, it's just not the wisest decision considering you are starting out with no equity and you have a tremendous mortgage.

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this is probally the only solution for those who cant put down 5, 10 or 20% down. A slightly larger payment may be managable now but to save for a down payment takes alot longer.

For us, its very wise instead of attempting to put money down, we would be paying insurance. Once they get established in there jobs, they will have more income to reduce the mortage and vaule on property will increase no matter what.

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It's definitely better than renting, that is for sure.
I understand it takes a long time to save for a DP. So, you do what you have to do to get the property, real estate is the best investment you can make.

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Posted by dkwife

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Posted by MCDO15

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Posted by dkwife

Congrats!
But like others said, it's just not the wisest decision considering you are starting out with no equity and you have a tremendous mortgage.

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this is probally the only solution for those who cant put down 5, 10 or 20% down. A slightly larger payment may be managable now but to save for a down payment takes alot longer.

For us, its very wise instead of attempting to put money down, we would be paying insurance. Once they get established in there jobs, they will have more income to reduce the mortage and vaule on property will increase no matter what.

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It's definitely better than renting, that is for sure.
I understand it takes a long time to save for a DP. So, you do what you have to do to get the property, real estate is the best investment you can make.

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Im just curious, how much does that translate into montly payments?

Im guessing $2K or a bit more?

and how long will it take for them to be able to make a profit let say if they sell.

Im not in the market at all but like to read and learn for the future.

Thanks.

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Posted by lilmrs

She said she paid for closing costs

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She said she paid 5k for closing costs. She still financed 10k of the closing costs that she will be paying interest on for 30 years. It adds up.

Her monthly payment will be about $2520. Plus whatever property taxes will cost and homeowners insurance. (will probably bring the payment easily over 3000 a month).


And MDO... don't get caught up in the trap that owning is 'always better' than renting. I read a really good article about this on MSN once. If I can find the link i'll post it.

But like I said if it works for the OP... then its fine I guess.

Thats what I figured around 3K or a bit more in the end. We couldnt afford that.

Then we would also be worried should something happen to our jobs or if the RE market came down(not necessarily tanked) etc. It's too much of a ? mark for me.

I will give the OP credit on one thing though in this thread.

The 5.5% and 6% rates she got for this type of loan is pretty good. I am impressed.

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Posted by DjPiLL

And MDO... don't get caught up in the trap that owning is 'always better' than renting. I read a really good article about this on MSN once. If I can find the link i'll post it.

But like I said if it works for the OP... then its fine I guess.

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yeah...we are still figureing out what we want to do...with the way the market is going, we might try and play the game now. if not, we will wait and rent. We have a good senario renting (we rent from my sisters house) but i rather own somthing at the end and have more own space. For once, i would love not to wake up to banging kids upstairs from me.


As with the rate...yes..its great...we got a estimate of about 6.15 to 6.35 or so

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Posted by ValeryEsq

Hi all. I do not post often but have read soooo many posts on this site where everyone said you can't buy a house with 0% down and you pay higher interest and etc etc etc...well you can and none of that is true....

My DH and I just bought a house on LI for 420K and did 100% financing and also avoiding the PMI buying doing an 80/20 loan. AND got 5.5% on the 80 loan and 6.0 on the 20 loan. AND we also did sellers concession thus taking a mortgage out for 430K to cover some of out closing costs....in short, all we paid out of pocket was 5K in closing costs. THAT WAS IT!!!!

Yes, we have very good if not perfect credit but we did not have to pay any sort of other fees b/c we were doing 100% finance. Our issue was b/c I was in lawschool we didnt have lot of money saved but now that I am done my DH and I could afford a larger monthly payment but just didn't have the money down. So this worked for us.

So for all of those brides out there who think they CAN NEVER come up with these crazy downpayments-- dont sweat it...
all we needed was 5K for closing costs and then we gave the seller 10K to put in his escrow as 'binder money' that he just gave back to us at closing. This way the seller was secure by havng our 10K should we back out, but we didnt have to put it towards the house.
So, good luck

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that's great!! i'm glad it worked out for you!!!
Congrats!!

Yes it is inspiring