Buying a house, with less than 20% downpayment

do it. mortgage insurance would cost you roughly $100/month. they'll escrow your taxes and insurance for sure.

but it's better than renting...particularly if you want a home. you'll still be building equity.

i don't think you'll get a 100% loan. you'll have to put down at least 5%, i think.

 

buy new and you'll have all the financing options available. Either and 80/20 or FHA.

There are pro's and con's to both, but when you really look at how little the down payment effects your monthly payments, it's generally a wiser decision to keep that money in your pocket.

 

My wife is a realtor & has people buy with nothing down all the time. There are several options you have, one common one is an 80/20 loan to avoid the PMI. You just have to get with a good lender and see what all is available with your credit.

By the way, if you do not have a realtor, my wife can answer any questions you might have and help you out. She deals with a lot of new home buyers buying both new construction and resale. Her contact info is:

Angela Brown
Keller Williams
angelabrown@kw.com

 

look into getting an "80/10/10" loan. you borrow 10% from one lender and put down your own 10% which makes a total of 20% downpayment. that way insurance is less and some other things. just look into it as an option. it worked best for me.
good luck.

 

This is what we did: Got an "80/10/10" loan to avoid PMI. Because our purchasing price is lower than the "fair market" price, we refinanced it three months later. This time, the 80% is based on the high end of the market price so that we actually borrowed enough money to payback the 10% loan.

 

I did an 80/20. It's kind of a pain in the ass, but if you can get all of your ducks in a row, it's the way to go. I pay exactly the same for my house note, insurance, taxes, etc, that I paid in rent a year ago. And now I'm building equity.

 

You get 2 loans from the same lender. Its like a second mortgage on your house.

100,000 house

80% loan for 80,000
20% loan for 20,000

 

We did a double buy down and put zero down. Started out at 4% first year 5% 2nd and now we are at a fixed 6%. Our PMI is $58 a month, not that big of a deal.

 

You don't have to escrow your taxes and insurance. You can choose to pay them yourself. While this will cut down your monthly payment to the mortgage company, you will need to pay this directly to the insurance company and taxing authority, but you can generally pay each of these every 6 months.

 

I would absolutely buy with less than 20% down.

Make sure the payments (mtg, tax, ins, maint) make sense, and it's a place you want to keep for a few years. If the payments are significantly higher then rent, consider if you're better off saving the difference. But if you're in it long term, you're almost always better buying.

Good luck.

 

wow, all these responses with good feedback....i remember a few months ago where there were only a few responses when people were interested in purchasing!

Kudos to everyone who has purchased and is now relaying their experience!

 

I just bought a new home 2 months ago, we used FHA loan, process was almost too easy

our PMI is $63.97/mo

remember that you can cancel the PMI once you've got 20% equity, so it isn't something you will be paying forever

 

Hey, go to Home123.com, they're a sub-prime lender so one of their pluses is that they don't require PMI on any of their loans. Also, they have 100% financing programs for those who qualify. I know they have offices in Houston, Austin, Corpus Christi & San Antonio. If there's anything else I can help you with on this, feel free to email me through the board.

-Turbo

 

With my credit and everything my Broker said the best way to go was the 80/20. That PMI stuff basically is the same cost as doing the 80/20 way and you are about the same without putting money down.

 

sort of on the same topic...

what is yalls opinion on the best location to buy a townhouse in Houston sometime during 2007?

i am planning on buying a townhouse around mid year next year and so far im liking galleria area and midtown. from what ive heard, galleria area has already peaked in terms of appreciation while midtown still has lots of room for appreciation. any other areas yall think would be better or equally as good? my price range is around 250K

 

I only put 5 percent on my house and with the 2 percent kickback I got from my realtor I only put 3 percent down plus closing costs.

I did it with a 80/15 mortgage. The first 30 mortgage is for 80 percent. The second mortgage is for 15 percent for 15 years at a interest rate about 1 percent higher than the first. This allows you to avoid mortgage insurance.

 

You absolutely can do it, and you can arrange for very long life/low monthly mortgage loans.

Keep in mind that the main kicker is that you'll eventually be paying for more interest over the course of the mortgage. Also, owning a house can be more expensive than an apartment in that you are responsible for maintenance and upkeep. When the A/C unit goes under, you're the one having to shell out the $3k for the new one. You need to be certain that you're not biting off more than you can chew. If you're having to work the loan over to be sure you can afford things month-to-month, you might be in serious trouble when (not if) an unexpected major expense pops up.

Evan

 

Buying a house with less than 20% down is feasible. Like everyone else is saying you can do the 80/20 loan, 80/10/10,and others. The loans are easy to get depending on your credit background.What I suggest you to do is get in touch with several mortgage brokers and tell them your situation. They'll help you choose the loan that will best suit you depending on how much you can afford. Make sure you talk to several. And if you need help in any step of the way,and you're not working with a Realtor, feel free to email me at brianvn13@yahoo.com. I'm also a Realtor.