How to pay the big down payment when buying a house?

Question

Hi,

How do people pay the big down payment when they buying a house, when it's for example 200,000$
Where they get all that money or do they take a loan?
Thanks

Answer 1

They work
They save their money

People go to school, study, graduate, get great jobs and make lots of money. Everyone is given that choice. If you choose not to go that route, then buying an expensive house is not in your future. Stay in school and study hard so you can get a good job.

Answer 2

Most can NOT put down 20 percent -In years past banks wanted ppl to pout down 20 percent - and those days are long gone - for the average person with homes on the rise, and income on the decline. Income has not gone up as much as home have - but homes are on the decline now - so you may be able to get a home that YOU can afford now.

Now - with the many programs out there if you you have a 580 middle credit score you can get 100 percent financing - and get into a home that you choose now, instead of waiting.

If you go with a FHA loan, FHA has MI included. (With a 580 + you will be going sub-prime the rates are higher by about a 1 percent, but you have no MI. (MI is mortgage insurance in case you default on the loan, it is a way for lenders to have added insurance. It is not the same as Home Owners insurance, ok) VA loans do not have MI insurance.

Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are a lot of factors involved.

With a government loan - collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true....


Go to these websites

http://www.nehemiahcorp.org

http://www.fanniemaefoundation.org/...

http://www.fha-home-loans.com/

http://www.freddiemac.com/


ALSO -
When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.


Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.


Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency's and other useful information. This is not an advertisement - just helpful information for you...

Answer 3

No you don't get a loan because that adds to your income debt to ratio.If you don't have enough money to put down for a conventional loan then you might want to consider FHA guidelines in your area. Conventional loans require at least 5%. With FHA you will only have to put down about 1-3% depending on how much you go over the FHA allowed amount.

Some homebuilders will let you make installments on your down payment while your house is being built. Try MI Homes. www.mihomes.com

Answer 4

Seriously? If you really want to know, everyone I know that's my age (30-35) that bought a house, including me, borrowed or begged money from their daddy for the down payment. I have no idea how people "save" $20,000- $60,000. Especially if you went to college, since we all have gigantic student loan and credit card debt from that. You can get a loan for it, but you have to pay extra every month.

Answer 5

You save until you have enough for a down payment.

Some IRAs and Education accounts will let you withdraw penalty free for the down payment on your first home.

You use the profit from the sale of your house to make the down payment on the new house.

Answer 6

It's normally paid in cash from personal funds.

Down payments cannot come from borrowed funds, so you cannot take out a loan for it.

Answer 7

not many people have 20% down payment if they are buying their first house. right now there is so many mortgage programs without any down payment or as little as 3%.

Answer 8

Savings

Answer 9

People who buy these house have good jobs, otherwise they would lose the house post haste.