I am looking into buying a town home next year and i was just wondering about the down payment. I am getting married and moving out and it will be the first home i've ever bought. I heard that when you buy a house, you need to have at least 10% of the cost as a down payment, but we won't be able to come up with that kind of money, so my question is, do you have to make as much of a down payment on a town home as you would a regular house?
2007-02-01 07:48:20 · 5 answers · asked by Ham Wallet 1 in Business & Finance ➔ Renting & Real Estate
Yes, if you want to avoid FHA and mortgage insurance.
You can buy a townhouse and get a mortgage with no money down. But it does not qualify as a conventional loan. You would have to go through the FHA, and that will cost you a few thousand dollars.
Since you do not have a 20% down payment, the bank will make you buy mortgage insurance. You will have to buy mortgage insurance until your equity is built up to 20% of the value of the home.
2007-02-01 07:55:06 · answer #1 · answered by regerugged 7 · 0⤊ 0⤋
Check into the zero down programs through the Federal Government. The rate may be higher though.
You can also do what's called and "80-20", where the 80% is the actual fixed mortgage, and the 20% is either an Equity Loan or an Equity Line of Credit. You'll avoid the PMI insurance that way. Your payment with this method may be lower depending on the rates on the mortgage/equity/ELOC accounts.
2007-02-01 15:59:54 · answer #2 · answered by t_roe 3 · 0⤊ 0⤋
You do not have to put anything down on either a house or a townhome. Go to a mortgage broker when you are ready and they will give you your options. If you have the income, and the credit, lenders will give you all the money. Putting money down will help get you a better loan, and allow you to buy more house though. You will also have closing costs to pay. These are usually 2% of the purchase price and will be added to your loan, or need to be paid upfront. It is getting harder to qualify for 100% loans, so I would try to save as much as possible before you purchase.
2007-02-01 15:58:31 · answer #3 · answered by Ron B 3 · 0⤊ 0⤋
I am an investor and I purchased my current townhome with no money down. I also just purchased a single family home last week with no money down and I was able to receive $10K that went towards my closing costs. With the right credit score (keep an eye on this continually), the right mortgage broker (use a broker not a loan processor), and with the right seller (have a good real estate agent to negotiate your deals) you can into a townhome with no money down AND have your closing costs paid for. I have done it. Also, as an investor I also assist people in getting into properties without having a good credit score and without having to get qualified for a mortgage. Let me know if I can help.
2007-02-01 16:35:18 · answer #4 · answered by William T 1 · 0⤊ 0⤋
I bought my first house a month ago and did not put any money down on it, as we wanted our liquid assets to go towards fixing up the kitchen right away.
Depending on your credit, you could get a 0 down loan with no PMI. I had to take an on-line "good neighbor course" about the steps to buying a home, and it greatly reduced my rates. Work with a real estate agent and if they know it's your first house, they will work with you step by step so you know whats going on.
Good luck!
2007-02-01 16:01:09 · answer #5 · answered by tigeri4263 3 · 0⤊ 0⤋