Here’s my situation: Looking to buy a home. I have little ($5K max) to Zero down (preferably zero). I have NO DEBT. ZERO. I owe nothing to anyone. My credit cards have a zero balance, my car is paid for. ZERO DEBT. I personally make $45K a year. I will have someone living with me who makes $15K a year. I have been employed steadily for 15 years (I’m 33) and have rented the same apt for the duration of that time never having been late even once on the rent. I’m employable in multiple fields so if my current job goes south I wouldn’t have trouble finding another job. I had a couple collections issues in my early 20’s for medical bills (One of which I disputed) but have since had two loans (both paid off early) and a few credit cards (all open and with no balances and again, never been late or had collections issues). I’ve got a 401k and life insurance with equity I can borrow from. Anyone have any idea how likely it is for me to get a home loan with zero down? Or a home loan at all? I’d be looking for possibly up to $300K. If you think I could get approved anyone know what a good lender might be? Lending Tree? BoA? US Bank? Any advice appreciated.
First time homebuyer with zero down?
29
May
Realtoratheart
May 29, 2010 at 9:08 pm
Wow, what you fail to understand is we can’t answer this. Your first step needs to be pre qualification with a lender. It’s possible that because you have NO debt, you may not qualify at all. Use a local or regional lender, or even a credit union. But don’t use BOA or USBank.
jlf
May 29, 2010 at 9:22 pm
No way unless you’re eligible for a V.A. loan. You need to save first for the down payment. And that income is not nearly enough for a $300K loan. Google “mortgage calculators” and you can plug in numbers to give you an idea of what you might qualify for.
golferwhoworks
May 29, 2010 at 9:29 pm
on your income you top out at about $150,000 no way $300,000 Never buy with a friend NEVER EVER. I see these post all the time that some one will not get off the house and wants large sums for a buy out.
Seek out a mortgage professional in your state to get qualified to buy. There are2 loans with 100% financing the VA or USDA rural loans. Now some states have grants available for first timers
I am a mortgage banker in TN
shamrockluver
May 29, 2010 at 9:35 pm
Look in your local phone book for a mortgage broker. They can get you preapproved over the phone in like 5-10 min. They will ask you some questions and then can tell you about how much you could qualify for. Also they have some loans that are zero down, you will just have to ask what kind of loans they offer. Good Luck~
That is what we done and are waiting for our paperwork to go through the underwriting process right now.
Steve D
May 29, 2010 at 9:58 pm
Golfer is correct and deserves the “Best Answer”
At your income alone, you top out at no more than $150,000 and probably a little less. Rule of thumb is about 3 times your salary (in this case $135,000) but with no debt, you can afford a bit more. If you were to share ownership and use the other person’s income, that puts you at total income of $60,000 and top out at $180,000 to $200,000.
The only zero-down mortgages, again as Golfer mentioned, are VA and USDA, but they both have qualifications. For the VA loan, you must have served in the armed forces. The USDA has other qualifications (location, etc.), but offers a zero-down program for those within the income limits, etc.
If you don’t qualify for either of these two programs, the next best is an FHA mortgage with 3.5%.
Some states, as mentioned, do have various incentive programs top help you with the purchase of your first home – check with your state government to see if they are offering help and if you qualify.
One last item are closing costs. All real estate transactions come with closing costs. The basic closing cost is recording fees which are necessary to transfer title of the house to your name. Additionally, when you finance the purchase, the lender requires you to do certain things, such as pay for an appraisal, get homeowners insurance, plus various fees to prepare the paperwork and record the change of title. These fees/costs can add 3 to 5% of the purchase price on to the purchase – and except for USDA/VA loans, cannot be rolled in to the mortgage. In some areas, it is customary for te seller to pay a portion of certain of the fees (half the transfer fees for example). Additionally, when negotiating over price, many times in order to sweeten the pot, the seller will offer to pay a portion of the rest of the closing costs.
Finally, the lender usually likes to see two months of mortgage payments in the bank after closing.
So summarizing, on a $150,000 loan, you will most likely need $5250 down (3.5%), $6,000 in closing (4% of price), and about $2,000 in the bank (2 payments) for a total of cash on hand of $13,200 minimum.
Heather
May 29, 2010 at 10:18 pm
First things first, you will not qualify for a $300,000 loan with income of $45,000 regardless of whether or not you have any debt. You will probably qualify for $150,000 or so.
As for the 0% down, you will not find a loan for that. You may be able to have an 80/20 mortgage where one mortgage is for 80% of the loan and another mortgage for 20% of the loan. The second mortgage will have a higher interest rate. FHA loans are available to many people and require as little as 3.5% down.
Also, you need to remember closing costs. Buyer’s closing costs are typically between 2% and 7% of the purchase price of the home. You can try to negotiate with the seller to have them pay a portion of your closing costs.
The first thing you need to do is get PRE-APPROVED for a mortgage. This is different from prequalification and is more likely to make any offer you put in more attractive to the sellers as it shows that a lender is preapproving you for that mortgage.
Landlord
May 29, 2010 at 10:32 pm
Your only option is a VA loan, and you would only qualify for maybe 110k. You do not earn enough money to buy a 300k house.