Buying a house without downpayment?
My finance and I are trying to buy a house. He has a good job but no savings for downpayment. His credit core is over 700. Will he be qulified to buy a house without downpayment. Or how much is the minimum downpayment in this case. We also have heard about rent to own program. Is it a right program for us?
- real estate guyLv 79 years agoFavorite Answer
YES. USDA loans are 100% and then have the seller pay the closing costs. Talk with a lender.
- Wayne ZLv 79 years ago
No money down home purchases helped cause the housing crisis so they have been pretty much done away with except for veterans using VA loans.
If he can qualify for an FHA mortgage, he will need 3.5% down. A conventional mortgage requires 20% down.
"Rent to own" is pretty rare. There are no official programs. You have to find a seller who is willing to enter in to a rent to own contract with you and that would be tough to find. With a typical rent to own agreement, you pay an amount over and above the rent with the overage being put in to some sort of escrow account to be used as a down payment at a later date.
You will have to rent for while longer and save up for a down payment.
- RachaelLv 69 years ago
You can get a home loan without a down payment, but you will have to pay private mortgage insurance. This is something most banks require if the mortgage is for 80% or more of the home's value. You can have the bank cancel the PMI when you have paid enough of the loan principal to make the amount owed equal 80% or less of the home's appraised value.
Rent to own programs are usually hideously sleazy. They will charge something called a "lease option fee," which means you'll pay as much or more per month than you'd pay on a standard mortgage. Plus, not all of your monthly payments will be put toward the purchase of the home. It can be as little as 60%, while the rest goes into the broker's pocket. You can get into a home without a down payment, but your payment will be even higher. Additionally, when you've been in the home for the one-year option period, they'll start looking for any reason to kick you out of the house. Any violation of the terms of your contract, no matter how minor, means they can put you out of the house, keep all of your money, and rent it to someone else. If you go this route, you need to read the lease to own agreement VERY carefully.
I strongly advise trying to rent and live small until you've saved enough money to make a 20% down payment on a home. It will save you thousands in the long run.
- lightupthesky25Lv 59 years ago
There are NO banks that are going to finance 100% anymore. That was exactly what led to the whole real estate bubble we're in right now - people bought homes at overinflated prices with mortgages (many of them 100%) that they couldn't afford. Now they are being foreclosed on and/or are upside-down on their loans.
The lowest down payment you will be able to get is 3.5% with an FHA loan. Your fiance should be able to qualify as the minimum credit score is only 620.
- How do you think about the answers? You can sign in to vote the answer.
- menjameseLv 49 years ago
I am in this same situation. You will not find someone who will finance without a down payment. You can take the same route we are taking, and get an FHA loan. This has a low down (3.5%), and is a fixed interest rate. I would talk to your real estate agent, or mortgage lender, to find out if the RTO program is right for you.
- ?Lv 79 years ago
No With the amount of defaults all lenders have tightened the regulations. You need 20% down for a conventional mortgage or 3.5% for an FHA mortgage. Rent to own are 99% scams
- knudsenLv 43 years ago
A co-sponsor of the 1999 regulation, Rep. James Leach (R-Iowa), spoke on the Democratic national convention and co-based the gang Republicans for Obama. And a Senate GOP aide noted that the ninety-8 Senate vote in 1999 that sent the law to President Clinton's table lined "aye" votes from Reid and Democratic vice-presidential nominee Joe Biden (D-Del.). This invoice grow to be signed into regulation by none different than.... CLINTON