I'm 25, and I seriously considering buying my first property. I had some money in my Roth IRA that I was going to use for a down payment, but after reviewing the guidelines further I realized the money would have to be in there for at least 5 years for me not to incur any penalties. I don't want to wait 5 years to buy my first property.
Like a lot of people in my generation, I currently live at home. I really want to get ouf of this current situation within the next few months. I really want to get my own place. I figure why rent, when I can own.
A no down payment mortgage seems like an interesting option but I'm a little weary that it may be too risky. Do these type of loans generally carry higher rates? What are some of the risks involved?
2007-01-30 05:06:47 · 5 answers · asked by acvader 2 in Business & Finance ➔ Renting & Real Estate
As long as you have a credit score over 620 and have a good work history for at least 2 years will be fine. You have two options you can do.
You can take out one loan for 100% and have a slightly higher rate then normal and pay Private Mortgage Insurance(PMI).
Or you can do an 80% first with a great rate and a 20% with a little higher rate.
Then all you would have to do is cover the closing costs which should only be a few thousand, or do sellers assist, that is when the seller pays all the closing costs for you. That is something you have to work out when putting in your offer to buy the home.
I am a mortgage consultant and have done tons of 100% loans. Then after the 5 years comes up you can take that money out if you wish and pay down the mortgage and refinance then to get the lowest rate you qualify for.
Good luck, need any more advice feel free to contact me...
2007-01-30 05:37:12 · answer #1 · answered by Anthony P 2 · 1⤊ 0⤋
Go for it; you get a bigger tax writeoff and your money can grow tax free in your IRA. The IRA is always there as a backup plan anyhow. The 2nd mortgage might have a slightly higher rate depending upon where you go. Check out the free evaluation form at
www.totaldebtsolutionsllc.com
and they will recommend a loan officer with low rates on 2nd mortgages. Good luck!
2007-01-30 11:10:43 · answer #2 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋
The rates on them are only slightly higher than if you were putting a small down-payment down. Try looking at My Community loans or Home Possible loans. The rates and PMI are MUCH better than FHA. You can only make a certain amount of income, though.
2007-01-30 05:11:40 · answer #3 · answered by KL 5 · 1⤊ 0⤋
My husband and I got our house with no down payment and we got money back at closing. It took our mortgage broker almost three months to get all the finance programs we qualified for but it is well worth it. We also got a fixed rate too.
2007-01-30 05:16:42 · answer #4 · answered by Lynnemarie 6 · 1⤊ 0⤋
The interest rate is a little higher, depends on your credit. There are program out there where you have no down payment and the seller pays closing costs (can be expensive). When I bought my new house, we put down less than 500, seller paid closing costs, and interest rate is decent.
2007-01-30 05:12:25 · answer #5 · answered by tonya l 2 · 1⤊ 0⤋