Home Buying in Atlanta>Question Details

Mom, Home Buyer in Atlanta, GA

As a first time home buyer , do you have to put down a deposit on an initial loan for a house?

Asked by Mom, Atlanta, GA Sat Apr 13, 2013

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Natallie Keiser’s answer
As a first time homebuyer, please consider attending a homebuyer education workshop by a HUD certified, nonprofit housing counseling agency. They will give you a good overview of the homebuying process. Most housing counseling agencies will also offer free, one-on-one counseling after you attend the workshop to help you prepare your purchase plan. You can find a list of agencies at the link below.

Additionally, at a workshop, they should also share information about downpayment assistance programs that you may qualify for, such as Georgia Dream, county government programs or NeighborhoodLIFT. Some of the downpayment assitance programs can also be used on closing costs. They cannot usually be used for the earnest money deposit however, which you pay at the time of placing a contract on a home.

For City of Atlanta downpayment assistance programs, visit the Invest Atlanta website - http://www.investatlanta.com/buildDev/HomeOwnershipAndMortga…
1 vote Thank Flag Link Mon Apr 15, 2013
0 votes Thank Flag Link Sat Feb 28, 2015
It will depend on what type of mortgage you qualify for and choose. There are some with no money down such as USDA or VA and FHA is 3.5% down. All have closing costs which average 3% which you can ask the seller to pay. Start with meeting a local and trusted loan officer who can pre-qualify you at no cost.
0 votes Thank Flag Link Sat May 25, 2013
It depends on the type of loan but typically you would have to put down 3% of purchase price!
0 votes Thank Flag Link Sat May 25, 2013
Mom, you're going to need to have available anywhere between $2500 and $3000 to close on the purchase of a property. Assuming you're using down payment assistance with an FHA mortgage...

• Earnest money deposit: Typically $1,000, one-percent of the purchase price or $500 for a HUD property under contract for less than $50,000

• Appraisal fee: Up to $500 except in the case of HUD-owned properties (rarely a fee since the appraisal is usually already done)

• Optional (but highly recommended) home inspection: Up to $350

• Cushion: The remainder to cover any remaining down payment, closing costs, utility connection, other required inspections, etc.

Of course, you will also need the down payment if you do not qualify for down payment assistance. In addition, the lender will likely want to see savings, reserves and possibly more.

Solomon Greene
Georgia Real Estate Brokers Associate, REALTOR®, Certified Affordable Housing Counselor
Keller Williams Realty Atlanta Partners
(678) 775-2677
0 votes Thank Flag Link Tue Apr 16, 2013
Earnest money is not required when buying a house. This deposit is only to "hold" the property so that the seller doesn't sell it to someone else. It's also used as a good faith deposit. "I'll give you this money and in return, you give me first right of refusal on the sale of it". I'm buying a house right now with no earnest money deposit. The seller is so desperate to sell the house, he's even willing to spot me the down payment and pay all my closing costs. This type of loan is not a typical loan. It's for people who have difficulty showing income, assets or have issues with credit. Most banks, too, won't lend money to loan officers and Realtor's.

If you want to avoid putting money down, find a home that's been sitting on the market for over 6 months located in the USDA area and buy it. USDA loans offer 100% financing with no mortgage insurance. Although you may have to pay for an appraisal, because it's a closing cost, you can reimbursed for it if negotiated properly by your Realtor through the seller. Other fees not usually talked about that can catch you off guard if working with a loan officer who's inexperienced:

Home owner's insurance policy for 1 year
Home Owner's Association dues (if applicable)
Home Owner's Association set up/application fees (if applicable)
Land Survey
Termite Letter (if seller doesn't pay)
Inspection (optional in some states, like GA)
Misquoted property tax escrow deposit
Title requests (adding someone to title)
Home Warranty

Bill Polack
Polack & Associates, LLC
404 644 3295
0 votes Thank Flag Link Mon Apr 15, 2013
There will be a down payment for most any loan except a VA. You probably would be asked to pay for an appraisal, credit report and even some processing fees prior to closing. Good luck..Do it soon, supply of inventory and interest may be at it's lowest point.
0 votes Thank Flag Link Sun Apr 14, 2013
Yes, EVERY Seller is going to require an Earnest Money Deposit (EMD) before you would be able to get a property under contract. For most sales prices, a minimum of a $1,000 deposit would be required. The higher the sales price, the more EMD might be needed.

The EMD will be credited back to you at closing. That money can then go toward any down payment, closing costs, or pre-paids due from you. The only two 100% financing programs are USDA (for rural areas) and VA. An FHA mortgage will require a 3.5% minimum down payment. Depening on your credit score, a Conventional mortgage would require at least 3% down.

If you are looking to purchase a property, working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your mortgage options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes Thank Flag Link Sun Apr 14, 2013
While the answers provide are correct, it still depends. To make an offer you will probably need to make an earnest money deposit. The greater the price of a home typically the more earnest money is appropriate. There are many programs to buy a home with very little money. The lowest combination is typically on a HUD foreclosure. Of foreclosed homes HUD represents 10-30% of the foreclosed homes. HUD requires an earnest money of $500 on homes under $50000 and $1000 on homes above $50000 and above. HUD homes also have the advantage of getting an FHA loan with only $100.00 Down. One of our clients closed on a home April 1 with a GA Dream down payment assistance, a 3% FHA Loan and their total to close this $113000 was $1240. Yes it is possible to buy a home with less money than the security deposit on a rental. You just need to find a REALTOR that is familiar with all the programs available to you.

Bruce Ailion,
RE/MAX Greater Atlanta
An Atlanta Real Estate Expert Serving Clients Since 1979
Certified Residential Specialist
Certified Real Estate Broker
Accredited Buyers Agent
MS Real Estate and Urban Affairs
Certified Distressed Property Expert
Certified Investment Agent Specialist
203K Certified Specialist
2050 Roswell Road
Marietta GA 30062
404-978-2281 Direct
404-386-3682 Assistant Robin
678-760-6266 Buyer’s Agent Adam
770-973-9700 Office
The LinkedIn Realtor
0 votes Thank Flag Link Sat Apr 13, 2013
If you have a military background and fit the criteria you may qualify for a VA loan that requires no down payment. First time homebuyers usually go for an FHA loan that requires anywhere between a 3.5% to 5% down payment. A conventional loan will have you placing at least 10% down. If you have any questions feel free to contact me anytime. I'd be happy to help and place you with a loan officer to guide you through the loan process.

Tyler Willis, REALTOR®
Keller Williams Realty Intown Atlanta
621 North Ave NE, Suite C-50
Atlanta, GA 30308
Office: (404)541-3500
Direct: (678)656-5524
0 votes Thank Flag Link Sat Apr 13, 2013
More often than not, you will be expected to put down earnest money which demonstrates to the seller that you are serious. I usually ask that my buyers put down at least $1,000. FHA loans require 3.5% down payment. There are down payment assistant programs such as the Georgia Dream.
0 votes Thank Flag Link Sat Apr 13, 2013
Depends on your area. There are some programs like a VA loan or a USDA loan that do not require down payments. You need to check with a local lender as they can guide you in what you need to do. Good luck.
0 votes Thank Flag Link Sat Apr 13, 2013
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