Home Buying in Wayne>Question Details

brad_manor, Home Buyer in Wayne, PA

What options do I have if I don't have money for a down payment.?

Asked by brad_manor, Wayne, PA Thu Jun 6, 2013

My wife and I had to use our savings for an emergency and don't have the 3.5 down payment. We both have excellent credit...a low debt ratio and 2 well paying jobs. We could easily make the new mortgage payment and then some. Could we take a personal loan out for the down payment amont (approx 15K)?

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Save until you can come up with some money down- at least 3-3.5% down. Yes, 100% financing is back on the market but it is still extremely difficult to obtain and even it requires some money into the transaction. Also, look into grant programs that you and your wife could possibly qualify for- ask possible lenders (if you we're to go with them) as well as your agent. Good luck with everything and save!!
1 vote Thank Flag Link Thu Jun 6, 2013
In most cases No, you can not take out a loan, some types of loans allow a gift of down payment and some states have grants for the 3.5%, speak with your loan officer on what you can and cant do
0 votes Thank Flag Link Fri Jun 7, 2013
In your situation you have options.
There will be options you could do.
There will be optons you SHOULD do.
If you have no downpayment, you will find it EXTREMELY hard to position yourself as an able and qualified buyer in the eyes of a home seller. Your FULL PRICE purchase offers will be repeatedly kicked to the curb. (the reasons are numerous and suitable for another thread)
As Carmelle said. "Save until you come up with some money..."
Make yourself a able and qualified buyer, THEN go find a home to move into.
The suggested 'could do' options will provide a season of frustration, wasted time, unnecessary expenses, and disappointment.

Best of Success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
0 votes Thank Flag Link Fri Jun 7, 2013
Hello Brad,

FHA allows for a gift for the down payment funds. You could also withdraw from your 401k or IRA for the down payment. Many 401k's allow you to borrow the money from your 401k and pay yourself back.
Also if you are looking to buy a house to the North and West of Audubon or to the West of Chesterbrook, They are USDA eligible zones and you can do 100% financing.
If you are a Veteran the VA also allows for 100% financing.
There is also 100% financing from the Pennsylvania Housing Finance Agency (PHFA).
Montgomery County also has closing cost assistance programs as do many other counties.
It is important to know that FHA does not allow you to borrow funds for down-payment unless it is from your 401K.
Remember that you can do up to a 6% seller assist with these programs so if you have the money put aside for closing costs you can get a seller assist and use that as down payment money.

Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
NMLS ID 143960
0 votes Thank Flag Link Fri Jun 7, 2013
low debt ratio and 2 well paying jobs??? then you should be able to save some money.

save part, borrow some, be conservative in the price of the home/condo/co-op. you can always upgrade later on.
0 votes Thank Flag Link Thu Jun 6, 2013
Hi Brad,

FHA allows gift monies to be used for down payments. Perhaps you have a family member that can help. Other alternatives would be: 1) borrow against your 401k or other retirement assets (seek guidance from a lender on guidelines) or 2) request a delayed settlement date on the home you intend to purchase to allow time to save.

With FHA, you can also ask the Seller to pay closing costs up to 6% of your loan amount. Your true out of pocket expense can be limited to your 3.5% downpayment. Feel free to contact me if you want to review these options.

Brendan Reilly | Broker/Owner
Crescent Real Estate
C: 215.510.2992 | E: brendan@crescentrealestateco.com
F: 1.866.836.7013 | W: http://www.crescentrealestateco.com
0 votes Thank Flag Link Thu Jun 6, 2013
Hi Brad,

There are a few options out there for you, such as a USDA 100% financing option, depending on what area you're looking in. My advice is to speak with a lender who will educate you on your options and knows every loan program available to you. Good lenders can be creative and if you have good credit, then that will help with your options.

-Kay Pugh
Main Line Specialist
The Salas Team @ Keller Williams
0 votes Thank Flag Link Thu Jun 6, 2013
Check with a local bank that has Fha and other federally endorsed lending programs, you can be gifted a percentage of your down payment, or you can ask for concessions in the purchase agreement, different programs have different ratios and allowable amounts. On a bright note, most people do not qualify for these programs because of poor credit, you are already ahead of the game with good credit and good jobs!
0 votes Thank Flag Link Thu Jun 6, 2013
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