I'm frugal, my credit is good and I currently earn $40K/year. I contribute the max. allowed to my 401K. I also have a small amount of my car loan remaining and student loans of about $30K remaining.
2007-09-04 17:47:01 · 4 answers · asked by Dani O 1 in Business & Finance ➔ Renting & Real Estate
There are several loan options available to someone with your credentials, even without a down payment. There are FHA loans and almost any mortgage company will have a program that allows you to get a mortgage with little or even no down payment.
And regarding your 401K, I would not recommend touching that money unless you have no other options and you've talked to a tax professional about any penalties you may face by borrowing from it.
I recommend you continue saving as much as you can for your down payment on your house.
Twenty percent of the cost of the home is the typical recommended down payment, but there are numerous loans that let you put down less. It's usually better to put as much down as possible, but it's nothing to worry about.
This is a buyers market in most parts of the country and will probably be this way for a while, so there really is no need to rush. Take your time and find a good deal on a home and work with a trusted mortgage professional to find the best rate and payment available to you. You’re in a really good place right now with good credit and you shouldn't have any trouble getting a good mortgage.
I hope this answers your question.
I have added a link below with more information about down payments. Good luck with your home search!
2007-09-05 06:21:08 · answer #1 · answered by Quicken Loans 5 · 0⤊ 0⤋
Doesn't sound like you're in the best position financially to buy a hose right now. I would suggest waiting another year and saving some money... something along the lines of 1/2 of your anticipated mortage payment.
Keep in mind, if you borrow against your 401k, THAT will also have to be considered when you're figuring out your debt:income (the payback amount/month).
You can absolutely talk to a loan specialist at a bank that does mortgages, bring in a copy of your credit report, and have an open mind. They see applications every day, and will know what will help you get the best deal once your finances are in order.
Good luck
2007-09-05 00:58:27 · answer #2 · answered by Dan B 3 · 0⤊ 0⤋
It is not a good idea to borrow from the 401k. You will lose alot of money in the long run and may have to pay it back right away. Find out more about your plan at your work. I would try and get the student loan paid down first. And save some in a money market account that you can get to later. I would recommend Suze Orman's book, The Nine Steps to Financial Freedom. Very good and practical advice for anyone. Hope this helps.
2007-09-05 01:00:26 · answer #3 · answered by knowyourself 2 · 0⤊ 0⤋
Most important--don't get in a rush. There are government programs for first time home buyers but they require a 30 year mortgage but check into them and figure out how much interest that is. For some of them, your down payment is forgiven if you live there for 5 years or so. Be sure you have enough money and can afford the house of your choice. Be sure you have enough put back in case you need some type of major repair and insurance and taxes go up. It will happen so be prepared. So many people are losing their houses because they could afford to get in but they may have wanted more than they could really afford and they had nothing put away for that rainy day. It's a buyer's market so you can really look over houses and should be able to find quite a deal. Research everything so that you understand everything that has to do with buying a house. Remember you want to have left over cash so you can afford to go to the doctor, buy furniture, take a vacation or just have fun. Don't overload yourself with housepayments.
2007-09-05 01:07:41 · answer #4 · answered by towanda 7 · 0⤊ 0⤋