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How to own a house without money!
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Posted by breanna_jem (My Page) on Fri, Nov 16, 07 at 11:32
| I am planning to buy my first house but I do not have that much of money. Are there any alternates and what should I be careful about while negotiating such a deal? I do not mind going in for a Mobile / Manufactured Home. Help!! |
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RE: How to own a house without money!
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Hello Breanna,
My daughter recently wanted to buy a mobile/manufactured home but could not swing the deal with the bank. She was looking at 4% over prime on a floating rate.
Once I saw that she was sincere I stepped in, took out a loan against my own house at prime on a floating rate and then lent her the money. The loan is in my name but my daughter is making the payments.
So the question for you Breanna is do you have any family who would be in a position to give you a hand?
Ian |
RE: How to own a house without money!
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| I have to ask why you haven't been able to save a down payment? How can you be sure that you can afford the costs of home ownership? Not just the mortgage, but the insurance, taxes, repairs and upkeep. There's nothing wrong with family helping, but I'd assess my financial situation as clearly as I could - buying a home you can't afford can be disasterous. |
RE: How to own a house without money!
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| Co-signing for a loan can also be a disaster. But of course, not always as there are responsible people who simply need some help. But zone 8's right. Take an extremely critical look at your situation. If you don't have a down payment, you probably also don't have any financial cushion to take on the added responsibilities ownership requires. Can you hold off a little longer since making a major purchase shouldn't be done when you feel somewhat desperate. Bulk up your financial resources - I'm thinking when this housing crunch settles itself out, prices drop and/or level off, there may well be a surplus of nice, affordable housing with doable conventional fixed rate mortgages available. If you wait and make some plans you won't feel as though you simply settled for what you could get as opposed to what you might have really wanted. |
RE: How to own a house without money!
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| Look into an FHA loan - thats how i bought my first house. You are going to need a few grand for a small down payment... |
RE: How to own a house without money!
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| I would honestly not advise a mobile home--they lose money like crazy! My friend just sold her mother's mobile home... for $3,500. Yep, that's right. $3,500. So unless you get a used one EXTREMELY cheap, I wouldn't do it. You would be throwing your money away. That being said, I do have some really good advice for you. My advice is, yes, you can buy an actual house... but not until you take home buying classes at a non-profit housing center! You can find a non-profit housing center in every major metropolitan area--look on the web. Just make sure when you one find one that it is legitimate non-profit, not some fake created by a smarmy realtor. Look for the the NeighborWorks America certification (NeighborWorks is a national non-profit created by Congress). Also, a good non-profit might have funding from Fannie Mae, or your local county or city authorities. Our non-profit had all of these. Now, you may be asking what a non-profit housing organization can do for you. Well... when my husband and I attended classes, they taught us everything we needed to know about buying a house. They taught us how to best approach the loan process, how to work with realtors and home inspectors, and how the actual buying process itself works (escrow, etc). They figured out for us what an acceptable loan amount would be so that we could definitely make our payments. They were fabulous! Sounds good, right? You should also know that your non-profit can help you fix your credit, if you need to do that. They will look at your credit record and help you figure out what to do about it. If you have bad credit, there is no point in trying to buy a house, because without good credit, you will get the worst interest rate known to mankind. But in as little as six months, you could have much improved credit and be ready to start looking for a house. Also, your non-profit will have a list of approved realtors, loan officers, inspectors, etc--people you can truly trust. Otherwise, if you just pick people at random, you can easily end up with a crook! And, finally, the non-profit might have access to special loans with very low interest rates. For instance, when we were taking the classes, our non-profit could offer loans at .5% below what we could get on the normal market. If you want to look at the website for the group we worked with, you can find it at the link below. Good luck! |
Here is a link that might be useful: Portland Housing Center
RE: How to own a house without money!
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Do you have 6 months of living expenses put aside not to be touched unless it is an emergency...such as being out of work for whatever reason.
You do not want to buy something without a back up cushion emergency fund. It would be too easy to have to default on your loan, regardless of who you are making the payment to.
Few people ever expect the unexpected to ever happen, but it unfortunately happens all the time...people get sick, people lose their jobs or have their hours cut, People get injured and maybe cannot work for long periods of time. My first 'home' was a mobile home, bought used, and set on a rented lot for $25 a month. I was able to pay it off quickly because the initial price was small, and the lot rent so cheap. In the 10 years I was in it I was then able to save money to have my home built. Don't end up being married to a big ole house or mobile home payment, with no money left for upkeep and savings. Save up until you are financially ready to buy a place and be able to afford all that goes along with ownership. Too many folks these days bought more than they could afford, rates rose, 'things' happened, and buyers defaulted on their loans, losing their homes. Be very careful you are financially 'set' to take on such a responsibility as owning your own home. Sue |
RE: How to own a house without money!
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| The first home I (we - actually I was married to hubby#1 at the time) was an FHA repo. This was in 1968 and all we needed was $1000 for a down payment. It was a good deal. More recently (in 2001) son bought a VA repo - he made a low offer (of $107,000) that was accepted. He put 20% down and now has a mortgage of less than $60,000 on a house that zillow estimates to be worth $300,000. It can be done - but you do need to have some cash and be prepared. |
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