Questions about house buying

DH and I are going to start looking for houses in a few weeks. Our lease is up in July but we're probably going to renew for another year but we're interested to see what our money will realistically get us.

Can someone tell me about the extra loan you have to take out when you put less then 20% down? And did anyone use any grant housing programs?

Thanks.

Re: Questions about house buying

When you put down less than 20%, it's not an extra loan, it's extar insurance - private mortgage insurance (PMI).. you only have to pay it until you own 20% of your home's value.

Also, there are conventional and FHA (federally backed) mortgages. With an FHA, you can put down as low as 3.5% or something like that, but you have to qualify and often the property that you are looking to buy has to be 'FHA approved' as well. But there are definitely options out there...

I'm in the same boat as you... just renewed our 1 year lease, and hopefully in the next year it'll give us a good chance to save up and really get a handle on our finances while we start looking!

Re: Questions about house buying

When i bought my apartment (co-op), i didn't have the 20% also so i did a little workaround to avoid paying the extra PMI:

I got two loans - one for 80% of the loan, and one for 10% (i was putting 10% down) ... that way, i didn't have to pay PMI *but* the 2nd mortgage had a high APR. I did the math though, back then, and it did make financial sense ... but you will obv need to make your own decisions

Re: Questions about house buying

No way we would have 20% down (and we didn't want to wait- thankfully we didn't and got a low interest rate!). We're getting an FHA loan and putting down 3.5%. Not very happy that we have to pay the mortgage insurance and it seems we'll have that for awhile though.

ETA: Also, I saw on the Home board you wer asking about School districts. I asked a bunch of questions about school districts and found out it can be a VERY touchy subject. People who live in the SD will almost never bad mouth it and get very defensive (understandable if they send their kids there). So you really have to take some of the comments with a grain of salt. You can get 2 VERY different responses on the same SD.

The best thing you can do is research the school's report card, look at their website online, and talk to close friends/family who are in the SD. Also if you know any teachers they usually have a good idea about most SDs. I'm familiar with many SDs on the South Shore in Nassau if you need any info.