Financing in Menlo Park>Question Details

Safaa, Other/Just Looking in San Francisco, CA

Can I purchase a house without down payment ?

Asked by Safaa, San Francisco, CA Sat May 5, 2012

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Here are some additional thoughts. Buying a house with 0 down is possible through a few ways, but the question Debbie raises; "is it wise" comes to mind. A few years ago 0 down with low credit scores was easy and common. Then, the mortgage world blew up and we've been in the mess we have now.
The current environment is not just due to easy financing, but it was a major component. With little invested, buyers had little to lose if they just walked away when things got tough.
Having some savings, for unexpected costs, repairs and upgrades is a great place to start. Having some down payment will keep your mortgage costs lower in most cases and allow you to gain equity quicker as the market improves.
Finally to answer your question, VA for veterans, USDA for rural properties, Key Bank has a 0 down program through its branches and it may be possible to do a lease/option from a seller directly.
Each of these options contains limitations, restrictions and risks, but I hope this helps get you started.
1 vote Thank Flag Link Sat May 5, 2012
Thanks Dan for a very informative reply, I agree for a wise short wait , Have a great day ..
Flag Sat May 5, 2012
Safaa - my question to you is.............if you don't have a down you at least have savings??

If the answer is "no", I suggest you save up money before buying a home.
Owning a home in more involved than simply paying the mortgage, taxes and insurance. If you don't have a cushion for unexpected repairs or personal emergencies, you might find yourself on very thin financial ice.

Most financial advisors will tell you to have a minimum of 3 months monthly expenses in the bank...some might suggest having at least 6 months.

In any event, even if you can find a way to buy with no money down......make sure you're protected by having funds in reserve.

And.........if you have any credit really should focus on improving them, along with saving money, first.

Best wishes..........
1 vote Thank Flag Link Sat May 5, 2012
Debbie - Thanks for bringing up the "unexpected repairs/personal emergencies “issues, now, I have a clearer image of hidden/unexpected costs! Thanks again
Flag Sat May 5, 2012
There's 100% financing in a very limited number of situations. VA financing--for veterans--is 100%. Some states offer special programs for a limited number of buyers with 100% financing. But--in general--no, you can't purchase a house with conventional financing without a down payment.

There's also owner financing. Most owners will want some down payment. But it's certainly negotiable, and there are owners who won't require a down payment.

Hope that helps.
1 vote Thank Flag Link Sat May 5, 2012
Don,Thanks for highlighting the chances of "Owner flexibility ".I am very grateful to all the replies I received as I certainly did not have a clue before ! Have a great day ..
Flag Sat May 5, 2012
Don Tepper, Real Estate Pro in Burke, VA
Generally no. You can get a 3.5% down payment loan from FHA, or as low as 5% down in certain areas with no mortgage insurance from Union Bank. VA loans can be done with no down.
The problem with all of these is that there are closing costs, so you do have to have some money. Also, the requirements for the condition of the property with these loans is usually higher than what is available.
Thirdly, this is a very competitive market. Few sellers will be comfortable with a person who does not have a large down payment.
Marcy Moyer
DRE 01191194
Web Reference:
0 votes Thank Flag Link Sun May 6, 2012
Don is correct in everything he says.
There may be a ray of hope for you; it is a very tiny ray, but nevertheless;

If you are a first-time buyer,
If you have lived in Menlo Park for at least a year,
And if you qualify as low to middle income compared to other M.P. residents,
you may qualify for a City sponsored program called PAL.
Talk to a local Realtor who will direct you.
This program loans you the down payment with very special terms.

Good luck and may God bless
0 votes Thank Flag Link Sat May 5, 2012
Don, thanks for the "PAL" information, I’ll keep it in mind while generating a down payment. Have a great day !
Flag Sat May 5, 2012
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