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I am looking to buy my first house, and I was just wondering what would be a good down payment?

I have no credit, so taking out a loan is not an option. There is a house listed where the monthly payment is in my price range (> or = $300 a month), but that is if I don't have to pay a down payment. If I do, I was just wondering how much I should start putting aside. I also have car insurance and student loans to pay, but thankfully that is all I have to pay. Would there be any small chance the homeowner would allow me to just make the monthly payments without the down payment (rent to buy, perhaps?)
  • August 16 2010 - Effingham
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Answers (6)

recentgrad:  Congratulations on taking the first step towards home ownership!  Your best action at this time would be to talk to a qualified and knowledgable lending professional.  Tell them your goals .. and the time frame in which you are hoping to buy.  They will review your current finances and credit with you.  After doing so, they will be able to ascertain your current capabilities or formulate a financial plan for you to accomplish buying in the future.  Before you take any action regarding a rent to buy, please talk to a real estate lending professional, agent ... or an attorney. They will advise you of the wisdom of entering a specific arrangement.
Remember, you have to be capable of paying all your obligations while renting or buying. 
Good luck no matter your decided course of action.  If I can answer any further questions for you, please write.
Gene
  • August 28 2010
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Contact a lender in your area to see what works for you. The more you put down the better interest rate you are going to get.
  • August 18 2010
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The monthly payment for "rent" or a mortgage is only a small part of home ownership.  Unless the home is maintained and kept in good repair the value will decrease.  That means that it is less expensive to rent than to own in many cases.
Start by seeing if you can save 20% towards a downpayment.  If you can accomplish that, you may be able to qualify for an FHA loan that requires far less.  You will find that a home in that price range may need repairs which will be required to be made, by the lender (FHA).  Use some more of your savings to make those repairs.
If you have money left over in your savings, do some maintenance over the next five years, and you may not end up in the hole.

  • August 16 2010
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minimum to put down is 3.5% for an FHA loan.

Otherwise, you need at least 10-20% (depending on loan amount) for conventional financing.

I suggest you speak with a good lender and then consider your options.

Jason
  • August 16 2010
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It is possible you can get qualified with non-traditional credit such as phone bills, rent, other items which don't report to the credit bureaus. Contact a reputable lender and good luck to you.
  • August 16 2010
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Sorry, I meant to say < or = to $300.
  • August 16 2010
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