Profile picture for JoeGuerrero

Looking to buy first home , but have hardly any money for a down payment. What are my options?

Only have $2500 saved. Credit score is about 660 And DTI is around 38%
  • March 10 - Fort Worth
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Answers (11)


user6064703
I wouldn't buy at this point, Joe. Get your credit score up a bit and your DTI down. Assuming your DTI doesn't include your current rent payment, it's going to be tough to fit a housing payment in there. Even if you can, allocating 45% of your pre-tax dollars to debt is a terrible idea. Even if a lender will give you a loan, I wouldn't do it.

I totally agree with this.  Why do you want to take on additional debt?  you will find yourself struggling and regret it.  Save money and pay down your debt which will bring down your DTI.  You will certainly find some lenders and programs to give you money to buy a house, but ultimately, you will have to make the monthly payments to all your creditors.

Naima

  • March 13
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Good advice given here. Joe check with Fort Worth Neighborhood Stabilization Program
  • March 13
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It will be extremely difficult to get a home loan without a down payment unless you are a veteran or seeking a USDA/rural approved property. If this applies to you then I suggest looking into a VA or USDA loan. Other than that, you will need a down payment. The smallest down payment would be an FHA loan which only requires 3.5%. Also, your credit and DTI is good and should work for most loans. So 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 11
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Profile picture for user6064703
Lowell,
Where exactly was misinformation given to Joe in this thread?
  • March 11
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Hello Joe,

Thanks for the post. I do see you have received a lot of misinformation on your ability to secure a home loan with down payment assistance.  TSAHC does assist Texan with down payments and grant to secure a home loan and based on you job and household income i can assist you in securing a home loan. I can be reach via my profile.
  • March 11
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Profile picture for MyraKPeric
In your area, it is cheaper to own than to rent. You can still qualify. There may be areas around Fort Worth that are close enough to commute , but are still considered rural and may be able to qualify for USDA loan which allows you to put 0 for a down payment. Contact lenders around your area. Here is a link for information on the loan program:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Additionally, go to the Fort Worth redevelopment center and find out if there are any special loans for first time buyers in certain areas targeted for redevelopment. These areas generally end up be "hip" areas since they are centrally located. Since they are in the redevelopment zone, one can usually get great deals if they are wiling to be in the "beginning phase" of redevelopment.
  • March 11
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Being a first time home buyer is a stressful situation because all you ever hear about is the huge down payment required. But if you go to a competent lender they should be able to show you the huge variety of options out there as a first time buyer you have. There are down payment assistance programs as well as first time home buyer credits and many other options. In some cases lenders such as the one that I do business with can get it as low as 3%, sometimes lower! Talk to different lenders and shop around for the best option for your scenario. Good luck!
  • March 11
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Profile picture for user6064703
I wouldn't buy at this point, Joe.  Get your credit score up a bit and your DTI down.  Assuming your DTI doesn't include your current rent payment, it's going to be tough to fit a housing payment in there.  Even if you can, allocating 45% of your pre-tax dollars to debt is a terrible idea.  Even if a lender will give you a loan, I wouldn't do it.
  • March 11
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Joe,
I have helped several first time home buyers purchase a home for as little as $1500 out of pocket. The best bet for you would be to contact a lender and ask what areas near you qualify for USDA loans which is a 100% financing loan given to buyers who make less than 75K per year. There are still some closing costs associated with this type of loan but you can always ask the seller to pay for them. Another avenue is to find a builder who is within the USDA area, they will likely pay for a large portion of your closing costs.
  • March 11
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I have a great lender that will be able to tell you exactly what you need to do in order to buy. If you aren't in a position to buy right now, he will be honest with you and give you direction on how to get ready and how long you will need to wait. Contact me through my profile on here if you would like his info.
  • March 11
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Profile picture for Dan Tabit
Joe,
Assuming your math is correct, and I can tell you banks have their own systems, your down payment isn't your biggest problem.  If you have an existing debt ratio of 38% (not including a mortgage or rent) you have very little room left to add anything. 
Now, rather than assume you are correct, meet with a great local lender and discuss your situation.  There are 0 down programs like VA and USDA and perhaps others in your area I'm not aware of. 
Getting your DTI in shape will likely be the first step.  Pay off some debt, but figure out which debts will have the biggest impact on your DTI.  This will both improve your buying power but also improve your scores and probably lower your rate when the time comes. 
  • March 10
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