First time homebuyers

[bunny nose]

Does anyone know of any programs that help first time homebuyers buy their first home? We are looking for help with down payment, or anything else we can get. I know I have heard of things in the past, but for the life of me can't find a thing.

I live in NYC if that helps.

Thanks
Karen

[Meredith]

80/15 loan (avoids PMI) and you put down 5%, essentially paying two mortgages.
80/20 loan (also avoids PMI)...you're essentially paying two mortgages at the same time and you don't have to put any money down (except closing costs). This is great if you don't have a lot of savings, or would rather hold on to the savings you do have.
First-time home loans (5% down, I think?)
VA loans (if you or your DH was in the military)


Those are all I can think of right now, but there are so many ways to find "creative financing". Watch out for negative amortization loans, however. Keep us posted and we can offer more advice once you find out more info.

Oh yeah, don't be afraid to call around to a bunch of places (at least 3-5) to get the best rate. Half a percentage point may not mean much now, but you will be glad when you pay your mortgage!!

[BethElena]

I know here in PA we could have gotten a HUD loan (or something like that) that only required 3% down. Those types of loans, though, have very strict guidelines of the condition of the property, and what the sellers are required to do to the property before it is sold.

Also check with your bank. I know ours let you finance 100% of the house(although I didn't know this before we bought our house.) Also check on the fees that various banks impose. We got the cheapest everything through M&T Bank (who then sold our mortgage a month later to a "larger bank.")

[mkredhead]

I was able to secure an 80/20 loan on my house earlier this year. It worked out beautifully for me. I got my loan through my regular bank, Fifth Third. They worked hard to get me the best deal possible.

[bunny nose]

Thanks for the info girls! I will look into it. One thing we don't have to worry about is the bank fees. A friend owns a mortgage broker office. He is going to get the fees waived for us. He is helping out a lot, but I like to look around on my own also to see what I can find.

I will keep you posted. I am going to SIL house this weekend (leaving soon), not sure their internet connection is working, so I may not be back here until Monday afternoon. But I will be back!

Thanks again!

Karen

[amorey]

We got an FHA loan. FHA does have some strict rules about the property you buy (no pealing paint, no code violations, etc), but you’d probably want your home to meet those criteria anyway. They have a few different options, all with low down payments and low interest rates. We got an adjustable rate mortgage at 3.5% two years ago. It did go up a bit, we’re paying 4.5% now, but there is a cap on it so it won’t become unaffordable. We paid 3% down and rolled in the closing costs. We do pay PMI every month, but it’s only about $50, and the great deal we got on the loan has more than made up for it.

[ks_piper]

We are in the process of closing on our first house with an FHA 3-yr ARM (adjustable rate mortgage). We're putting around 12% down and will pay closing costs at closing (aren't rolling them in). We'll only have to pay PMI (private mortgage insurance - in case you default) until we hit 20% of the mortgage being paid off.

We had less than perfect credit and a tiny income and locked in at 5.5% a week or so ago - not bad considering that interest rates are climbing again.

Our rate will be locked in for 3 years and then it will become adjustable within certain restrictions. We plan to re-fi in a year or two to avoid the adjustable rate.

The house you pick will have to be in good shape - not necessarily a bad thing for you! The seller's do have to pay more to close the house, but not a lot more. Lots of folks are actually pretty willing to deal with an FHA loan if they took good care of their property.

We are using Wells Fargo Home Mortgage and are very very happy with their help. :) We never thought we'd be able to afford a house on our income and here we are in escrow and likely to close in the next couple of weeks!

Best of luck!

[MrsSmith]

I didn't do any type of special program, but I was able to get 100% financing on my first house. Make sure that the mortgage broker is telling you ALL of your options.

[Sevilla]

You will have to do a search for programs specific to your local county/city/burrough (sp?).

We bought our home a year ago with the help of a 1st time homebuyer's program in our county. It gave us some free classes, 7% of our downpayment, all closing costs, and $20,000 worth of work on our house before we even moved in (new roof, new siding, upgraded electrical, repaired plumbing, new furnace, chimney repair, and a few miscellaneous things).

We had a rather long application to fill out, submit financial documentation (you had to make below a certain income--it was very reasonable though. For a married couple you just had to make $46,000/year or below. My friends who live in Chicago said that first-time homebuyer programs by them had a 'maximum income level' of close to $100,000-so it varies according to cost of living).

Our program was great. We got a conventional loan with a 0.5% interest rate deduction. All the $$ they spent on us is in the form of grants (though if we move from our home before we've been here 10 years then we'll have to pay off the balance (it gets reduced by 10% per year).

All in all we're very happy with the program and it's what enabled us to purchase our home :).

[KRL626]

I also live in NYC (Brooklyn) and was just looking into this. If you go to nyc.gov and find the housing website, they have a link to a down payment assistance program. The only downside is the neighborhoods you are allowed to buy in are restricted to certain areas and there is a pretty small maximum income requirement. But it's still worth it if you check it out.

[kindermom]

The only downside to 80/20 loans is that while you still get a competitive rate on th larger first mortgage, the second mortgage rate is significantly higher. I think our second mortgage is about 2% higher than the first. Because we had limited funds for a down payment and we live in an expensive area, I am grateful for our 80/15 (we put 5% down) loan.

[bunny nose]

KRL626, Thanks for that info. I will have to check it out. I never even thought to look at the government website. Dummy me. :o

Karen

[WisWis]

Definately check to see what programs your state offers, and if there are any for your area. We got our 30 year mortgage through the VHDA (Va Housing Development Authority) with 0% down and an interest rate of 4.85%. We do pay PMI, but it's only about $25 per month.

[isign]

We locked in at 6.25% which is high, but everything here is at the moment. We have an FHA loan, 0 down. The only thing we've had to put out for was our earnest $$ - which hasn't been cashed yet & we'll get back, I think - and our apprasial. We are lucky to have our seller pay 100% of closing, so we'll get that money back.

[justHB]

In the Bay Area, we did an 80/20, interest only loan when we first bought last year. About a month ago we refinanced so our terms are much different, but doing it this way allowed us to get a foot in the door before we were priced out entirely.

[Amy_6405]

We got a FHA loan and locked in at 5.85%. It was pretty easy to get the loan and we don't have to pay a whole lot of closing costs. We still have to pay PMI but hopefully we will be able to pay that off quickly.