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so, we don't own a house and i'm at the point where i really want to. i suddenly fear that i'll be paying rent when i'm 90! anyway, when discussing it lastnight with a friend, he said that home loans are much harder to get now without a 20% down payment. we'll never be able to save this much. is this true? how can we get around it?
 

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Well you could do what we did which was take a higher interest rate loan with 0% down for a year and then refinance. I don't know if that would work in the current market, I'm kind of out of the loop. We got an awesome rate on our re-finance, I still think we kind of lucked into it... our credit wasn't that great before we bought our house. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/shrug.gif" style="border:0px solid;" title="shrug">:
 

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Hmm, interesting question.. me and my fiance are kind of in the same boat... I am sure some others on here will have some input!!
 

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bank of america just requires 5% down for their loan.<br>
talk to a real estate agent. i'm sure he/she will be able to give you advice and point you in the direction of a lender who can get you the financing that's best for your situation.
 

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Home ownership is expensive. You do need to save up some money before you buy, both for the down payment and the an emergency fund for when something needs to be fixed at the house.<br><br>
I would start by figuring out what kind of mortgage payment you would be expecting to pay. If that amount is higher than your rent, start saving the difference. It will get you used to the higher housing payment and help you build up some cash. Spending habits have to change for a lot of new home buyers as they realize they have less spending money every month than they did...often means a lot of lifestyle changes. Might as well get accustomed to them now.<br><br>
Additionally, there are loan programs in many areas to help first time buyers. See what there is in your area. Any legit program is going to have some sort of cash on hand requirement or some sort of down payment but not necessarily 20%. Check the HUD website for legit programs by state.<br><br>
We shopped for a house and got ready to purchase for over a year. If you factor in the time before that we spent paying off all debt and getting into savings mode, it was more like 3-4 years we spent getting ready. We used money we had saved, money we inherited (though we could have done it without that) and the resources of a city/state program for moderate income first time home buyers. So it is still possible to buy if you don't have tons of cash to put down, but you need to be smart and practical. Don't get in over your head out of an emotional need to own a house...a lot of people did that and it is in part what is fueling this massive housing/credit crisis. When you buy, try to borrow less than they will lend you, get a fixed rate mortgage (especially important with housing prices slumping---taking an ARM and then refi at a year or two using the gain in the value of the house as the down payment/reason to get out of PMI is not a situation you can count on happening in pretty much any market right now.
 

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<div>Originally Posted by <strong>kijip</strong> <a href="/community/forum/post/9891572"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Home ownership is expensive. You do need to save up some money before you buy, both for the down payment and the an emergency fund for when something needs to be fixed at the house.<br><br><br>
Additionally, there are loan programs in many areas to help first time buyers. See what there is in your area. Any legit program is going to have some sort of cash on hand requirement or some sort of down payment but not necessarily 20%. Check the HUD website for legit programs by state.</div>
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Yeah to that.<br><br>
We lived in an increasingly crowded apartment for years, watching house prices go up around us. At last we had a bit of savings, knew we were going to be able to stay in the area, and found a house.<br><br>
Our state has a first-time buyers program that gives qualified buyers a lower-than-market rate on the mortgage as well as a closing cost assistance loan. You have to have a down payment of 3 to 5 percent (I can't remember), and you have to pay for the inspection, etc out of pocket, but other than that, your entire down payment amount *can* go to down payment, rather than to closing costs. Remember that closing costs can often be more than a down payment!<br><br>
The program has very strict guidelines, stricter than comparable private mortgages at the time we were buying. Your credit has to be in good shape, and you have to do a phone interview after reading a book about mortgages and homeownership. There's also mandatory PMI until you've got 20% equity. I know a lot of people did those 80/20 loans with ARMs to avoid PMI - but frankly, I think our PMI runs us less than the interest on the 20 part of the 80/20 would.<br><br>
The thing to remember about first-time buyer loans is that if you get a below-market interest rate, there is a "recapture tax" on that rate on your Federal taxes if you sell in less than 10 years. After 10 years the recapture tax is forgiven. Same with our closing costs loan - it is forgiven over 10 years, so if we sell before 10 years, we owe some portion of it back.<br><br>
Look into the FHA and state-sponsored programs (ours is SONYMA, in NY) - they can be a real boon to people having a hard time with a 20% down payment but who are fiscally responsible.
 

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<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>kijip</strong> <a href="/community/forum/post/9891572"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Home ownership is expensive. You do need to save up some money before you buy, both for the down payment and the an emergency fund for when something needs to be fixed at the house.<br><br>
I would start by figuring out what kind of mortgage payment you would be expecting to pay. If that amount is higher than your rent, start saving the difference. It will get you used to the higher housing payment and help you build up some cash. Spending habits have to change for a lot of new home buyers as they realize they have less spending money every month than they did...often means a lot of lifestyle changes. Might as well get accustomed to them now.<br>
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Also there are other expenses when owning a house: taxes, insurance, tools for repairs and for gardening, home repairs/improvements, more expensive utilities, etc. When we did the math for us owning would be almost twice as expensive as renting!<br><br>
oh and when buying you need to take into account closing costs, inspections, and repairs and new furniture that you might need upon moving
 
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