Tuesday, June 12, 2007
Buying a house
So Heather and I have been looking at buying a condo for a little while now. With a baby coming, our apartment is just too small. If we rent a bigger place, it's going to cost about as much as a house payment would be on a bigger place. So we decided the best move is to stop wasting money on rent and try to buy our own place. We've been looking at a really nice complex in Eagle Mountain. Last week we went out there with my agent (it sounds cool saying that) who's a friend of mine from work. We looked at 4 or 5 units in the complex while we were out there. We really liked a couple of them and decided on one. The next morning we made an offer and to our surprise, they accepted. We have been so excited since then. Until yesterday. A small (read: relatively big) wrench got thrown into the works. It turns out that the loan we've been approved for requires at least a 5% down payment. Now, you can call me naive and I'll agree with you. I've never bought a house before. I didn't see anything that said a down payment was required. 5% of the loan we're looking for is $7,000. It turns out I don't have $7k in any of my pockets and neither does Heather. So, needless to say I was a little bummed yesterday. All hope is not lost, however. After talking to my agent, he says that 100% loans do happen. Now might not be the best time, though. I've been reading that a lot of mortgage companies are a extra careful right now, because in the past year there has been a record number of defaults on home loans. Anyway, another option is to take out a personal loan at a bank and pay the down payment off with that. I'm even considering a website called Prosper. I discovered it on one of my favorite websites, Lifehacker. Prosper essentially facilitates person-to-person lending. You post a request for a loan and someone else out there can decide to give you the money according to the terms you agree on. It seems pretty interesting. Anyway, that's the situation we're in. If anyone else has any suggestions, I'm definitely open to them.
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3 comments:
I think there are programs where you don't have to pay a down payment. You might want to check into programs like first-time buyer programs or low-income programs, etc.
Matt,
Wells Fargo has a first time homebuyers program with no down payment. I don't know what the interest rates are on it but it is worth looking into. Here is the link to it:
https://www.wellsfargo.com/mortgage/buy/loans/descriptions/nocash
It is the No Money Down Plus program. Good Luck
I bought my condo three years ago (as a single woman - believe me it makes a difference... otherwise they wouldn't have printed it in huge letters on all the paperwork!)
I did it with no downpayment and with two loans, an 80% and a 20%. If you have excellent credit - they'll do it for you.
If you're a risk - they'd be right to steer you another direction.
I think the default situation is due to people getting into more house than they need/ can afford.
There is no shame in living below your means - In fact I find it admirable. How much house/space do you REALLY need? you need a place to eat, a place to sleep and a place to wash up.
Good luck.
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