Home Buying in 06492>Question Details

Carolyn, Home Buyer in Wallingford, CT

Is it possible to get a mortgage when you don't have much money for a down payment?

Asked by Carolyn, Wallingford, CT Sun Feb 24, 2013

We have less than $3,000 saved , but would need that for moving expenses. We're looking for properties under 200,000. What kind of loan can I apply for if I have no down payment?

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Hi Carolyn,

The short answer is yes but you need to answer the most important question?
• Is your annual income stable and at least $60,512.00 because most lending institution’s or private home sellers will not make a loan to a person who’s income exceeds 30% of their total annual income.

$200,000 loan amount (Home purchase price)
4.00% 30 year fixed rate no points (For example only)
$954.80 Monthly principal and Interest
$125.00 Monthly mortgage insurance (This applies if less than 20% downpayment.)
$350.00 Monthly Real Estate taxes (Based on $200K home $4,200)
$83.00 Monthly homeowners insurance ($1,000 per year)
$1,512.80 Total monthly carrying costs.
$18,153.60 Annual carrying costs. (Equals 30% loan to income ratio)
$60,512.00 Annual minimum income required to support expenses.


Depending on your personal situation you may be able to receive a 100% loan from CHFA (Connecticut Housing Finance Authority)
http://www.chfa.org/default.aspx



Carolyn, I hope this helps with your decision please feel free to contact me anytime with your Real Estate questions.

Mark Gracia – Realtor
William Raveis Real Estate
465 South Main Street
Cheshire, CT 06410
203.272.0000 direct
mark.gracia@raveis.com

Please note: If you are currently represented buy another Real Estate broker this is NOT an attempt to interfere in anyway with your relationship. The above information is for example purposes only with no guarantee inferred or implied.
0 votes Thank Flag Link Sun Feb 24, 2013
Hi Carolyn,

The no money down USDA mortgage may work for you if you're ok with living on the out skirts of town in an area like Prospect, Bethany or Northford.

The USDA program is only available in eligible rural areas. You can use the following link to see which areas are eligible around Wallingford.

http://eligibility.sc.egov.usda.gov/eligibility/welcomeActio…

One of the best things about this mortgage is the monthly mortgage insurance is substantially less than an FHA or conventional mortgage and that's with no money down.

Here's an example: An FHA mortgage of $200,000 is going to have a monthly mortgage insurance payment of $208.33 but on a USDA mortgage it's only going to add $66.66 to your monthly payment.

The other nice thing is you can actually roll your closing costs into the loan as long as the appraised value supports it.

Please feel free to contact me for more information or help. You can also find info on my USDA Mortgage website by clicking the link below.

John Burke
Senior Mortgage Banker
Peoples Bank & Trust
(877)228-9069
1 vote Thank Flag Link Sun Feb 24, 2013
You can easily get a loan with 0 down. It's always nice to put at least a little down but you don't need to. As for moving expenses you could ask the seller in the offer to purchase to pay for your moving and closing costs.
0 votes Thank Flag Link Sun Feb 24, 2013
Depending on your income and credit you may also qualify for a CHFA loan whch is a 100% financing program that also has a down payment assistant portion. I have worked wth a few amazing loan officers that have this program available. I'm also currently working with clients buyng and using this program. I'd be happy to help you!

Jacqui Najjar
203-499-7236
0 votes Thank Flag Link Sun Feb 24, 2013
Carolyn, there are so many different programs available out there. I can put you in touch with a loan officer or you can check with your own bank as there is 100% financing available. Once you get prequalified, please contact me and I can start emailing you houses and take out to see them. Look forward to hearing from you, Julie Lucia, Realtor, Showcase Realty, 203-578-5631; julie@julierealestate.com
0 votes Thank Flag Link Sun Feb 24, 2013
@ Greg. Everything you said about the USDA program applies to the subsidized direct version, not the USDA guaranteed program that I was talking about.
0 votes Thank Flag Link Sun Feb 24, 2013
Ah...good point John.

Carolyn, that's a good example of why I try to pair up a Buyer like yourself to work get pre-qualified by a local mortgage lender (John, are you local to CT and able to provide Carolyn with personal face-to-face service? If not, do you have a CT rep. who you can refer her to?) who has his or her finger on the pulse of the particular programs they are working with.
Flag Sun Feb 24, 2013
I'll add to John Burke's comment about USDA mortgages. They are actually a good example of responsible home ownership lending in that you are required to attend counseling classes before you get a USDA loan. You also must have income and a purchase price that meet the parameters of the program.

There is an annual review of your household income and the payments are adjusted each year based on your income.

Finally, there is a recapture term associated with USDA loans whereby if you sell the home in the future (I recall something like within the first 10 yrs, double check that) then USDA can recapture some of profits that you might realize from the sale. That's not unreasonable in my mind since the recapture simply makes up for the interest rate discount you received while you owned the home (I recall they offer as low as 1% interest rates, also confirm that) and the shared appreciation lets USDA refund their program to help others.

CHFA is also a great program to consider like Esther suggested. FHA is out of the question I believe since 5% down is required and you don't seem to have that saved up (I think others who answered before me missed your disclosure that you only have $3,000 saved).

Best of luck to you with your desire for owning a new home.

Greg Hanner, Broker, REALTOR, e-PRO
0 votes Thank Flag Link Sun Feb 24, 2013
VA loans require no money down.
Web Reference: http://www.GetSoldOKC.com
0 votes Thank Flag Link Sun Feb 24, 2013
The only way to qualify for a 100% financing is if you are a veteran (VA Loan) or if your primary residence was destroyed by Hurricane Sandy. If not, you will run into a problem as FHA requires a minimum 3.5% down payment. With a conventional mortgage, depending on your credit and property type, you may qualify for only 3% down. From the information you've provided, I would recommend saving up at least to cover the minimum down payment. If you'd like to discuss your scenario in greater depth please contact me at your earliest convenience.


Kindest regards,


Paul Marzolla
Loan Officer
(201) 957-6768
pmarzolla@unvmortgage.com
0 votes Thank Flag Link Sun Feb 24, 2013
Hi Carolyn, of course you can! CHFA with DAP. Check out the chfa.org website, clicking on homebuyer mortgages available.

I would like to also make a recommendation. If you have two incomes, use only one income in determining what you can afford. By doing this you will be able to save for the future. Good luck and I'm available if you need a Realtor.

Esther Farr, GRI
http://www.adfarrrealty.com
0 votes Thank Flag Link Sun Feb 24, 2013
Yeah a good job and good credit would be your best hope
0 votes Thank Flag Link Sun Feb 24, 2013
Try going for an FHA loan. A lot will depend on your income and credit
0 votes Thank Flag Link Sun Feb 24, 2013
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