Eugene, Renter in Palm Springs, CA

what does 100 percent financing means does it means the buyer will not need to put a down payment ??????

Asked by Eugene, Palm Springs, CA Tue Nov 1, 2011

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Unless you qualify for a VA loan which is 100% financed you will have to come in with a down payment. However, there are many programs that you can investigate that have certain guidelines, i.e,. you can't make more than $75,000 a year, etc. Best to check with your qualified loan agent. And if you are buying a foreclosed or bank owned property, you can always ask the seller (bank) for assistance in non-recurring closing costs.
Joyce Virtue, Broker Associate
Five Diamond Properties
Ca Lic 01155911
760 861-1442
joycevirtu@aol.com
0 votes Thank Flag Link Mon Jan 9, 2012
One other thing, you will also want the lender to clearly estimate what your closing costs will be, sometimes you can negotiate this with the seller when making your offer.

Good luck!
Heather Paul, Realtor
Coldwell Banker
310-586-0364
0 votes Thank Flag Link Mon Dec 26, 2011
Yes, you will still need an earnest money deposit when writing up an offer for a property, this is a good faith deposit that you intend to purchase the property. There are a few lenders doing the 100% financing currently, they do have requirements such as credit score and loan to value ratios. Check with your local lender to discuss this and the payment options available.

Have a great day,
Heather Paul, Realtor
Coldwell Banker
310-586-0364
0 votes Thank Flag Link Mon Dec 26, 2011
Yes. However, I would be wary of this type of loan because this is one of the reasons why the current market is in the current state. People bought homes that really couldn't afford them and have lost them to the bank or having to do a short sale.
0 votes Thank Flag Link Sun Dec 25, 2011
Eugene,
Correct. No Down Payment. Closing costs though. Buyer will have to pay for some closing costs.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomebuying.org
http://www.socalhomebuying.org
California Department of Real Estate Broker License # 01312992
0 votes Thank Flag Link Sun Nov 6, 2011
Hello Eugene -

Just a thought, have you gone through your finances to see what price range or monthly payment you can afford for a home? And, remember to add something for HOA fees, if a condo, property taxes, programmed and general maintenance and repairs, insurance. If you find a home that, on the surface, looks like you will have the same monthly payment, or even a tad less than the rent you are paying now, you need to stop and review things.

100% financing will mean that you actually have no financial stake in the house itself, when you buy. Yes, you will have other costs and expenses to make the deal work, but it's really very risky to do it this way, and is part of the reason our housing market is in the mess it is today. If you would need to buy with no cash down, it might be a thought to continue leasing for a year while, as you build up financial reserves.

Home ownership is truly a wonderful thing - and when it comes with manageable finances and monthly out go, it's even definitely worth it.
0 votes Thank Flag Link Thu Nov 3, 2011
It means you don't put any money down against the balance of the purchase price, but there will be other expences like closing costs, escrows fees, etc..
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0 votes Thank Flag Link Tue Nov 1, 2011
Eugene,
100% financing does mean nothing down, but it doesn't necessarily mean no money out of pocket. There are closing costs with a purchase and a loan. Closing costs can be as much as 3% of the purchase price, but there are ways to address these too.
Sometimes the seller will agree to pay the buyers allowable closing costs. You need to establish an amount and include this on your offer.
You can ask the lender to pay the closing costs, however this happens by increasing the interest rate so you are actually paying them over time.
As others have said, 100% financing is not very common today. VA and USDA are the two national plans that I'm aware of, but you must be a veteran or purchase a home in a rural area and meet the other income qualifications for USDA.
Talk to a local lender to see if there are any local or state programs available and see if you qualify for any.
0 votes Thank Flag Link Tue Nov 1, 2011
Eugene,

Yes that is what it means. However 100% financing is practically obsolete these days unless you are using VA financing. There are some lenders that I have seen still offer 100% financing depending on the borrower and there are specialty programs out there. The best place to find the information that is pertinent to YOU borrowing is to speak with an accredited lender in your area and start figuring the options available for you individually.

Best of luck!
0 votes Thank Flag Link Tue Nov 1, 2011
That is correct. However there are only two type of loan the provides a 100% loan amount. They are USDA for rural areas and VA.
0 votes Thank Flag Link Tue Nov 1, 2011
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