What do I have to know and have when buying a used home with zero down?

Question

My husband and I are looking forward buying our first house. We are teachers and know that there is a program offered by some banks for first time buyers and/or teachers. Do we need a realtor that represent us in the process of buying? Will the realtor help us negotiate the price and do we need to pay him or her from our pocket? How much money do we need for closing costs, moving and other expenses? How much is an inspector? Thank you for the extra-info.

Answer 1

There used to be a program by HUD aimed specifcally at teachers, but it has since been opened up to others and is now known as the good neighbor program. In some states there are state programs aimed directly towards teachers, but they are rare. Regardless the zero down opportunity is available to most people.

Zero down is accomplished in one of 4 ways (all 4 ways also demand you make the purchase contingent that the seller pay all closing costs), 2 of which are harder to come by since the onset of tougher loan rules. These two are 100% financing and two mortages 80%/20%.
The third is by getting a convetional loan of 95-97% and writing the contract contingent upon the seller paying the downpayment on your behalf. this works like a charm if the necessary elevated price (so the seller nets the same amount if you had money to be put down) can get passed the appraisal.
The 4th option is by getting approved FHA and doing something similar to the third option except you have to take advantage of a loop holein FHA rules which say the seller can't pay your down payment. The loop hole is that while it is against the rules to have the seller pay the DP, it isnt against the rules to have third party give you the DP. There are all these non-profit organizations set up for this very purpose and a contract is written top have the seller pay the DP to the non-profit plus a service fee and the non-profit gives you the DP but keeps the service fee and you give the DP back to the seller. It is completely legal and I have helped dozens of zero down buyers in this manner.

I highly suggest you get a realtor to represent you but make sure they are familiar with no money down deals. I am always shocked when I come accross a Realtor who has never been a part of a zero down deal but it happens all the time, even with Realtors who have been in the business for 20 years.

Zero down will still cost you some. You will likely need $500-1000 for the good faith deposit which will be returned to you at the closing. You will likely need to $200-350 for the home inspection depending upon where you live and might need a similar amount to cover appraisal costs if your mortgage company requires it be paid upfront. i can't even begin to estimate moving charges but I am willing to bet you have moved before and could be a better judge.

Answer 2

A Realtor is great to have when buying or selling a home because they are experienced in what is new to you and they are knowledgable about all the things that average consumer does not know. A Realtors number one job is to inform you so that is why they are a valuable asset. And of course a Realtor will help you negotiate the price, your Realtor will be there with you throughout the entire process as consultant so that you may make the most informed desisions possible. The great thing about Realtors when you are buying a home is that it cost you absolutely nothing. Their fee is paid by the sellers of whatever home that you decide to purchase. But dont be mistaken, the still work for you and will work in your best interest. Closing cost vary by how much you are taking out on a loan as well as you credit score and other factors. This question would best be answers by a competent loan officer. Inspectors generally cost around $400 but it is the best spent $400 that you will ever spend cause inspectors can save you thousands of dollars by finding defects in a house that you or your Realtor could not have known where there. Hope I helped.

Answer 3

As first-time home buyers, a realtor MUST represent you. If you don't have a realtor and make an offer on a home, the realtor representing the seller can represent both you and the seller.

Closing costs are usually around 3%, but some loan programs allow you to finance the closing costs along with the loan (ours did).

As first time home-buyers, we bought a house with zero down. We qualified for a loan program backed by the USDA to promote growth in rural areas. We closed last week with a rate of 6.5%, no PMI. We just had to give a $200 good-faith deposit after we were approved. Definitely shop around for a loan - don't settle on the first bank to approve you.

A good realtor representing you should help you negotiate and advise you. The seller always pays the realtor's fees. A home inspection in my neck of the woods set us back $375.

Answer 4

that the loan is fixed for 30 yrs, at same interest. If you dont have a realtor or r. e. agent does not matter,much, if you buy a house you can go direct with the one than has the listing so hell be more interested in selling to you since hell have double commision or the whole commission, no shares so he will try to get a lower price for you too. the agent is payed frby a seller and not the buyer, the closing costs is about 5 to 10%, make sure the lending inst, doesnot charge more that what it says in the "truth and lending" papers, because sometimes they charge you "Junk fees", and after the property is registered, you can sue the lender for all this junk fees and you will win, an inspector can charge you from 300 to up? meke sure the inspector is not called by the seller or sellers agentor else he wont find any problem with the property you need one that has not interest, let see if the sellers agent call him. he will work for the seller agent, because he ll call the inspector many times more, but you just one, to see? all this things count in a transaction. good luck
I hope you can understand me, Im not a teacher, if you need more advise, send me an e-mail at [e-mail]

Answer 5

A Realtor is trained to know what is required in a real estate sales contract and what is not. Without a Realtor, you could end up singing a sales contract that you may regret signing later. In most states, the contract itself is so long and cumbersome there are Realtors who don't know all the contents. But, you need to have a smart, good, experienced Realtor who gets contracts accepted. In this regard, once you start a good relationship with a smart Loan Officer, have him/her refer you to a good Realtor who he/she personally knows has provided him/her with ratified sales contracts in the past.

With wonderful programs available like Fannie Mae's My Community which allows 0% downpayment on the My Community 100 program, you have no downpayment. Other programs require as little as $500 downpayment. These are great programs but because of the high loan-to-value ratios, mortgage insurance is required and is escrowed with the monthly mortgage payments. If you can negotiate 6% seller concessions from the seller, you should be able to get most, if not all, your closing costs paid by the seller.

In regards to how much the inspector will cost, you'll need to clarify whether you are referring to a termite inspector or an appraisal inspector. Appraisals in the Delaware Valley, Maryland, Virginia, and DC usually cost $300-$350.

Lewis
[e-mail]

Answer 6

Hi there! I am a realtor in Clarksville, TN. I have some answers to your questions. First off I do recommend you to find a realtor. I can help with that process no matter where you live. It is very important that you are comfortable with your agent and mostly that you trust them. I have worked with many first time home buyers and there are some progams that will help. I can't answer any about prices, because each area is different, but I can help you locate a good realtor in your area. Just shoot me an email telling me what town and I will do some reasearch for you!! Good luck! This is an exciting adventure!!! My email- [e-mail]

Answer 7

Yes, buying a home Zero Down Zero Out Of Pocket Costs IS A POSSIBILITY! However, there are many factors that determine if you are a eligible for those types of programs. My suggestion would be to get with a Mortgage Planner to analyse your situation and get pre-approved for 100% financing. Then start looking at properties, and when you find one, ask for a "sellers concession" to have the seller pay for all the closing costs. The only costs you may have to incur are the appraisal fees (normally $320), and I recommend a home inspection as well which is approx. the same amount. Takes some extra leg work but it is possible.

Answer 8

MyCommunity or HomePossible are the programs that you are speaking.
Realtors are always good to use...especially when it's your first home. They will help you do a comparative market analysis to determine the value of the home. As Buyers you dont need to pay a realtor....he/she will be paid by the seller.
Closing costs can range around 3-4%....and you can have the seller pay most of it ..or all of it. Home Inspections run from 300-450depending on the state you live in...and size of home.

Answer 9

I would always suggest using a realtor, they know the ins and outs of real estate! You do not want to make a mistake and alot of the process is techincal and you do not want to misunderstand anything! Found a great site with tons of real estate information for buyers and first time home buyers, good luck!
http://www.deedeehomes.com/
http://www.deedeehomes.com/PageManager/default.aspx/PageID=1135468
http://www.deedeehomes.com/PageManager/default.aspx/PageID=1980119

Answer 10

What you need to know , with less than 20% down , is . . .

You will be paying a hefty PMI (private mortgage insurance ) premium Every month . ( & it's Not tax deductible ) .

Wait until you have 20% .

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