Posts Tagged ‘home buyer’

It kind of looks like the whole worlds economy is going down the tube lately.  How did this happen?  Where did we go wrong?  Who is to blame? Yada, yada, yada.  I hate to break it to you but the world economy is on the brink of collapsing because of the US housing market.  It’s true! You see for the past 5 years or so, as a result of easy money and complete disregard for credit risk, home prices have been going up at an alarming rate.  Yes alarming but nobody bothered to sound the alarm or warn anybody because we were all to busy making money, and in the case of the home owner, spending money like there was no end in site.  All a home owner had to do was refinance every two to three years with cash out to wipe out their high interest credit cards and pick up a couple of hundred dollars a month in cash flow.  I can’t imagine what people were telling themselves as they met their trusted mortgage officer for the third time in 5 years to do it again.

Here is the bottom line if you are a first time home buyer today.  Don’t ever use your home as a bank, save for a down payment, protect your credit score like you would your own new born baby, and never go over 90% loan to value on a refi.  Owning your first home is great but it’s not worth it if you are house poor as a result.  I hope the home buyers and home owners of the future learn from the home owners of the past and don’t end up building another house of cards.

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The answer is generally no, in fact it is still possible to buy a home with no down payment. That said, not everybody will qualify for this mortgage program so I will mention a few things to consider if you are planning to buy a home with no down payment.

There are very few if any 100% purchase programs remaining in the mortgage markets today. Not long ago home buyers could get either one mortgage for 100% of the purchase price or combine a first mortgage for 80% of the value and a second mortgage for the other 20% of the purchase price. A lot has changed over the past 12 months as I’m sure you have heard and it is difficult to turn on your TV or surf the Internet without seeing something about the current mortgage crisis. So how does a first time home buyer purchase a home with no money down today? With a combination of an FHA mortgage and a 3% down payment made by the seller through one of many down payment assistance organizations.

FHA mortgages are readily available throughout the country and any one of our First Time Home Buyer Consultants can advise you on how to apply for an FHA mortgage in your area. The trick is to find someone who fully understands how the down payment assistance programs (DPA) work and has experience putting them together. The best results for this FHA mortgage combined with down payment assistance from the seller come from working with both a mortgage professional and a Realtor who both have experience with FHA and DPA programs. The easiest way to find experienced professionals is to call our home buyer hotline, or fill out our pre-approval form on http://www.FirstHomeGuide.com  and a local qualified first time home buyer consultant will follow up with you. The other option is to start calling and interviewing Realtors and mortgage companies in the local yellow pages until you find someone who appears to know what they are talking about.

The bottom line is qualified buyers can still buy a home with no down payment and in my next post, I will talk more about the down payment assistance programs, specifically the Nehemiah program.