NWR: Question for the homeowners...

MiniMin20

FI and I are looking to buy a house, but don't really have a down payment at this point. Does anyone know if it's possible to buy a house with little or no down payment -- or if this is even a good idea? Also, can you use the first time homebuyers' credit as a down payment? I know they were talking about extending that until next April.TIA!

jaimebeth9

You can't use the credit as a down payment.  You don't get that money until after you file your taxes next year.You can buy a house with no money down programs, a good lender will be able to guide you in the right direction.  Keep in mind that no money down programs don't always mean you literally bring $0 to closing.  There are costs associated with buying a house that these won't cover (in addition to inspections etc). IMO, it's a good idea to buy now if they extend the credit (otherwise it would be impossible to close by 11/30) and if it's a place you plan to stay long enough to make it worth it.  Also always a good idea if buying will be less money than renting (this was the case for me when I bought my first condo).

Krissie117

FI just bought (actually, we built) our first house over the summer.  Last spring, we were looking into different financing options.  I know the State of Maine has a program for first time home buyers, it's a special mortgage and requires very little down.  I think you may have to take a homebuys informational course to qualify, but it's worth looking into! Maybe if you Google Maine Homebuyer Programs you can find something that will work for you.  Good luck!!

MiniMin20

If they do extend that tax credit, I'd really love to buy now, since our lease at our apt is up in February and we don't want to be there another year. I think we could save enough to cover inspection, etc., between now and then, but not a down payment. Unfortunately, we don't qualify for a lot of home buyer assistance programs because of the income limits. I've looked into some of the MaineHousing ones but haven't found one we'd qualify for, but maybe someone there could help us out.Buying wouldn't be cheaper than renting, but it would be close, and we can totally afford the monthly payments, just don't have a big chunk of change saved up since FI has so much college debt and my salary is a little lackluster, haha.We'll probably take a first time home buyer class, just to educate ourselves. FI seems to be convinced we have to live with my parents (gasp) for a few months in order to save the money for a down payment. I'm really trying to avoid that! I feel like we should get educated in what's out there, before we take the moving-in-with-rents leap. Plus, I'd love to jump on this tax break if they do extend it. Maybe I should try and find a good lender?

angeliza

I definitely recommend the first time homebuyer class. Also, FHA and I think Rural Home are programs for first time homebuyers that only require a 3.5% down payment. I wouldn't recommend using 100% financing options because often the interest rates are much higher. Another piece of advice: don't buy a house if you don't have at least some savings for emergencies... I had a friend whose home inspection came back basically perfect but in the first 3 months that she owned the house, a pipe burst in the basement, the roof started leaking, and the septic system got backed up. She had spent every last dime of her savings on the down payment for the house so she ended up having to use credit cards and take out loans to cover these repairs. Not a good start.

darlin884

FI and I went through the first time home buyers class.  We went with Bank of America and this really nice woman named Linda Thibault.  She told us everything we needed to do and found us the Maine State Housing program.  we had been saving like crazy for a whole year but when everything was said and done, we only had to put down $1000 for earnest money when we made an offer.  The program we had paid for the closing costs and we only needed another $200 or so to go towards the down payment.  The only thing with this is that it's solely under his name because our combined incomes would be too much to qualify.  So... Look into it.

MiniMin20

Thanks ladies. I think we'll definitely take a class and see what our options are. The MaineHousing programs are good but we don't fit into their income limits, and I don't know if they'll let us just have it all under FI's name if they know I'll be living there too! Plus, we might be married before we buy the house.I hear what you say angeliza about having some padding in the bank. It's a smart move not to deplete your savings to buy the house in case something does go wrong. But I'm just so impatient to buy one, especially now that they approved that tax credit extension!Guess we'll probably be moving in with my parents....I really hope we don't regret it! I guess if we do we can always move out.

angeliza

I just wanted to say that you can get the loan in just one of your names, even if you're married or will both be living there. You don't even have to be sneaky about it. My credit is pretty bruised unfortunately so when we're finally ready to buy a house, it will probably all be in my husband's name.

angeliza

oh, and also, I didn't even take into consideration that you could just put that tax credit into an emergency fund for the house once you get it. That might make me more comfortable draining my savings if I knew I had that coming in to replenish it. Good luck! Now is definitely the time to buy if you can!

JaimeMarieB

We went with an FHA loan and had to put 3.5% as a down payment and our builder is paying the closing costs.  Hey there are a lot of lots left in our development! And his prices are reasonable. Email me if you want details.