Profile picture for slewandr

Buy with little money down or rent while saving for money to put down?

Hi,

I'm looking to get something more permanent and buy a condo in the city.  My situation is that I've cleaned out my savings to pay off my $100k in college loans.  I'm currently debt free.  However, I don't have a substantial amount of money left to put down on a home.  Should I rent for a couple years and save up this money to put down on a condo, or should I look into something like the 80-20 loan option?  What would be the best option for someone in this situation?  (I apologize if this is a dumb question. :))

Thank you for any help you can provide!
  • March 27 2014 - Columbia Heights
  • 1
    1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (5)

Best Answer

You pose a great question! But there are many layers and factors that go into the age old "to buy or not to buy" question. My best advice is to talk directly with a lender and see what your best options are.

Scott
  • March 27 2014
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Are you a first time home buyer? If so DC has a lot of great programs that will held with your downpayment. The one a couple of my clients are using is "DC Opens Doors". The city will give you your downpayment and as long as you live in the house/condo for 5 years you do not have to repay the money. It helps a lot of individuals who are in the same situation as yourself. So don't be afraid of trying to buy because there will be options out there for you! 
  • March 30 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

There are also other great loan options such as FHA that only require 3.5% down. This is a great option for you to consider if you would like to buy with little down. I recommend that you look into this loan since it seems that it would be a good match for your situation. Although, it would help to speak with a loan officer directly to compare your options. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • March 28 2014
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

If you'd asked this question two years ago, everyone would have told you to wait, no hurry, prices may even come down a little bit. Well, they're up 22% nationwide since January 2012, so THAT advice wouldn't have been so good!

I think that you should have six months' living expenses saved up in addition to your down payment, because things happen. But I was a buyer two years ago, and I'm still a buyer today.

All the best,
  • March 27 2014
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for DustinKelly
Buy -

If you have the ability to buy and your circumstances allow,  then its a better financial decision.  I wouldn't say renting would really allow you to save money, and by the time a year or two year lease is up the mortgage interest rates could be substantially higher.  I don't know your exact situation, Scott is correct to say that many factors would go into that decision.  I would be happy to listen to your situation over the phone and better advise you after hearing more details - [Removed by Zillow Moderator. Please see our Good Neighbor Policy.] - I am not in your area but if necessary could  find you a reputable agent nearby.  

I'm of the opinion,  when your renting your making someone else money,  when you own your making yourself money. There are circumstances though that require renting - However I would not let the amount of money you have to put down hold you back.  There are true no money down loans, as well as typical FHA loans only requiring 3.5% down.
 
  • March 27 2014
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.