what is the disadvantage buying home without a down payment .?

Question

when i calculated on mortgae calculator i find out the difference
between having a down payment and zero down a few dollars.

Answer 1

Your interest rate is based on your credit score and other factors that go into the lender deciding what rate they will charge each individual borrower.

The advantage of paying anything down on your property is the loan amount will decrease by that amount thus your payments will be a bit lower.

What are you really paying the first five years of your mortgage? If you said interest, pick up an apple and go to the head of the class.

The disadvantage is that you can get the same house for no money down and a 100% mortgage and still have the same amount of money in the bank as you started out with.

Now you have a house plus the same amount of money. I would call that a great advantage. If you properly invest that money in a good instrument you are in a better position, and is wealthier than when you did not have the house and also not put the money into a down payment.

Now the interest you pay on your home is tax deductible. The lender will send you a document at the end of the year indicating how much interest you have paid. This entire amount is deductible.

Also keep in mind that your house is appreciating in value each year that you keep it. In some years it will increase more than others and in some not at all, but over the long run this is a long time investment.

Ask you mother and father how much they paid for their home. Now ask them what is the value today?

Nuff Said!!!

If you are are young and have not reached your peak earning years then keep your money. If you have almost or have reached your peak earning years then perhaps you would or might want to place something down on the property, though personally I would not no matter what stage of life I am in. I am betting that I am gonna live.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

1. RISK. You did not factor this in to your calculation. If you live in your house for the first 5 years most of your payment goes to interest and not principal. If you lose your job and can't make the payment you take away your chance of selling your house at a lower price because you will owe about what it is worth. Remember real estate does not always go up.
2. PMI: when you don't put down 10%-20% you have to pay private mortage insurance (PMI) this would make your payments each month higher.
3. Rate: The more you take out on your house the higher the rate is on that money. It is more risky for the bank to loan 100% then 80% so your rate will go up. And you could get points.

The best thing to do is save up as much cash as you can to put on your house Min 20%. Then don't take out a mortage longer then 15 years and make sure the payment is no more the a 4th of your net take home pay. Then try to pay the house off as fast as possable. Also get a fixed rate not an adjustable.

Answer 3

If you have a down payment, you'll get a lower interest rate. At least 20% down for the best rates.

Answer 4

Since the market is dropping most likely they would not let you have 100% mortgage, that was yesterdays new the reason why is it would be a sub prime loan and you will be upside down.
http://www.breakingbubble.com/

Answer 5

See how much higher your interest rates will be.

Answer 6

higher interest rate, and bigger monthly payment.

Answer 7

you have to pay a higher interest.
www.freddiemac.com

sherly

Answer 8

POINTS ! = $$$$