I want to buy a house but i don't have money for the down payment. Can we buy a house or not?

Asked by Laura Escobar, Miami, FL Fri Jan 1, 2010

I've heard about the FHA but still i do not reach the 3% limit i just have $2000 saved and im affraid it all will go on closing costs. Help please!

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94
Dan Chase, Home Buyer, Texas City, TX
Fri Jan 1, 2010
Laura, if you were a veteran you might be able to get a V.A. loan with 0 down. But what would happen if 3 weeks later you have an unexpected expense of $1,500 come up? What would you do?

The real question is not if you could buy a house. The question is if you bought a house could you keep it.

If you want to buy a house maybe you should think of it as a 5 year plan. Cut out all of your unnecessary expense. Consider yourself broke. Stop eating out. Get rid of cable tv. Lose the internet expense. Only buy things when you have cash to pay for them. Buy used instead of new. Stop watching movies. basically you make life a lot more dull. But it will make your pockets more full. Use a credit card once a month. Then pay it off in full.

Maybe I can share a thought that helps you to look at expenses differently.

If I am in town and see a soda for $1 and buy it. How much does it cost me?
I do not need the soda, I would like it. It is an unnecessary expense I could avoid.

Most people say it is so obvious. The soda costs $1.

I say NO!!! It cost you $2.
You just lost the $1 in your pocket. It is gone forever. You are now behind $1 from where you were.
You now have to MAKE another $1 to replace it. That means you are out $2.
The one present $1 you gave away and the one future $1 you have to make to replace it with. Only then will your pocket be in the same condition it is in now. It will have $1 in it that really cost you $2 to get.

If you consider the true cost of spending money unnecessarily you will soon see how much saving can really do for you. If you could save $200 a month after 1 year you would have saved $2,400. After 5 years it would be $12,000. Now that is something isn't it? If you sacrifice today tomorrow can look a lot different.
32 votes
By then I'd be too old
Flag Sun Aug 6, 2017
Finally! Someone with good old fashioned common sense! I thought there wasn't anyone left!
Flag Sat Apr 23, 2016
@verngold - Living on other people's money is bad advice for housing, because of the risk involved; it's secured debt so if you can't pay, you lose the house, you still owe the balance, and now you're homeless, your credit is trashed, you can't buy a house, you can't rent an apartment.

As far as rising prices being the reason to buy now instead of later--while housing prices are going up, so should be your salary. If your salary keeps pace with inflation, you should be no worse off if five years than you are today. If not, you need to address your income problem rather go into debt simply because you anticipate you will be less able to buy five years from now.

Miami is a bit of a different market because prices there are much more volatile than most of the country. Volatility is a huge risk when you have a high loan-to-value on your house.

https://www.washingtonpost.com/news/wonk/wp/2015/08/18/florida-could-be-headed-for-another-housing-slide/
Flag Sat Apr 23, 2016
@stephenhickey - The second dollar represents opportunity cost. If you spend the dollar, you don't have it to do anything else with. In order to do the thing you originally planned to do with the money, you have to earn a second dollar to be back on track with your original goal. If you plan to save $1200 over the next year to take a small vacation, and you budget for $100 per month savings, and one month you decide to use your that month's vacation budget to go to a ball game instead of socking it away, you now have to make a $200 deposit in your vacation fund the following month to be on track to take your vacation when planned.
Flag Sat Apr 23, 2016
Wait::::::::::::::::::::
What is this guy thinking?
Does he realize how much property values are going up today, in 5 years he will be no further ahead than he is today. Grab the ring and if you fail at least you tried.
Never buy property with your money always use someones else s. It may cost a little more for you to do that but at least you you aren't looking back wishing you had.
Flag Fri Apr 22, 2016
The VA loan still requires Appraisal fees, Inspection cost and closing( Unless the seller agrees to pay it) . They dont let everyone know that
Flag Thu Apr 21, 2016
You spend one dollar and will have to earn two to replace it? This makes no sense at all.
Flag Thu Apr 21, 2016
Sounds like you have assets and income all muddled together in your mind.
Flag Thu Apr 21, 2016
I am rather lucky as I am a vet, so I can buy with 40 down, and no PMI. I currently rent a 2bdrm/ 2ba for $950/mo. I can buy for $100K for a condo and pay about $450mo. + util.,so I can save $500/mo just by buying.
Flag Thu Apr 21, 2016
While I do agree with your sentiment, I cringe at your attempted economic analysis. It is just simply untrue, illogical, and improper accounting. The soda only costs $1, not $2. The point is, however, don't spend the money if you don't need the item.
Flag Thu Apr 21, 2016
YES YES YES AND YES! ALL EXCELLENT IDEAS. We did that. SUPER FRUGAL plus more. We paid ourselves FIRST. We still have ZERO DEBTS---except one small mortgage PITI less than rent. We saved , made the offer we wanted TOOK OUR TIME and bought at the BOTTOM OF THE MARKET 4 years ago. We are now on top of another bubble but at 2.75% fixed interest we only have 11 years left before NO mortgage debt.
Flag Thu Apr 21, 2016
YOUR ADVICE IS EXCELLENT! I cannot tell you how many times I have heard your words over my lifetime from my parents. They are millionaires who scrimped and saved and invested in property when I was growing up. I am now passing on the same advice to my kids. By the way, life does not have to be dull when you are broke or are making yourself broke in order to achieve a goal. There are so many "free" events around your city and community that you can fill all of your weekends and children's time that you will be proud of everything you got to attend or see or be involved in without cost other than getting there. BRAVO to you and your advice.
Flag Thu Apr 21, 2016
Michael Lind…, Home Buyer, Roanoke, VA
Thu Apr 21, 2016
Problem most people here are not addressing is that while you rent is the saving in ownership.

Many say "save up for a couple years, then look again".

I'm in a similar boat. I'm paying $800 a month plus utilities to rent... having trouble saving up any money... but for a decent home in the area... I could be paying $500 a month plus utilities.. that's $300 a month savings. In 3 months, I'd save more than I could in a year renting.

So, if I bought today, in 6 months (rather than a couple years), I could have enough money for that 'financial bump" everyone talks about. Plus... I'd rather have someone "trying their hardest" to sell me a house when I'm struggling to afford it as I'll get a good deal... as opposed to someone trying to upsell me more house than I want when I have a decent down payment.

I want the $125K gem... not the overpriced $250K house. (That was the example I was given if I had a $10K down payment... I could ONLY afford $125K... but if I had a little money for a down payment, I could afford a $250K house.... )
12 votes
TIming is everything; market, life. High interest rates mean landlords pass it on in higher rents. Having built my home on a less than 10% down over 20 yrs. ago. I was the last to get mtg that is fully assumable to future buyer. I drove an old car rather than pass up land that wasn't around 1 yr later. I agree with Mich.Lind. that letting sellers know you are cost savvy gets respect & good deals. The bank feels better that they didn't lend to a fool. My kid never cared what the mtg was until she saw it was less than half of her rent. She could have been the person asking the question if it wasn't 2010 but it's hard to teach beyond example that saving up tons of cash isn't a guarantee it won't be misspent. It's not how much you have, it's how you use it wisely and no stupid spending. A brick & iron fencing and anything else contractors will sell you will quickly put you into foreclosure if you just want but don't need & three price estimates for every job stops impulse buys
Flag Fri Apr 22, 2016
You are correct in getting the lesser priced house. I will have $20K to put down on a $68K Older home. I have a certain amount that I can afford for a mortgage that includes insurance and taxes. I have been looking at structurally sound homes that need a bit of cosmetic work. There are plenty of possibilities in my area in that price range so I expect to find something within the year. Thank you for the advice about rejecting upselling.
Flag Fri Apr 22, 2016
After reading all previous responses, thank you for your insight. This is very much encouraging, rather the idea of renting 5 years saving with the thought that I should be able to save nearly everything, when actually I won't due to on-going bills associated with renting and living. Nevertheless, this idea give me hope!!!
Flag Thu Apr 21, 2016
You are right on. Purchasing a good, but modest, home not only is costing you less than rent, it is a savings plan as well. You are building equity instead of spending money for rent that will be gone forever.
Flag Thu Apr 21, 2016
I just bought with very little money. Seller increased the price of the house and gave me a seller's concession for the closing costs along with agreeing to pay half the closing costs. The half by seller's concession I am essentially adding that amount to my mortgage which for me is ok because I couldn't get the house any other way. First home buyer you need 3.5% down which I was able to save by going single zero on taxes so I got a hefty return and cutting back on expenses for a year.
Flag Thu Apr 21, 2016
Many banks have programs that assist with downpayments and closing costs. You can also ask the seller to pay your closing costs. There are many ways to purchase a house with no money down. just takes some homework. First and foremost, talk to a lender who's is a broker for many banks and get prequalified and talk about different programs
Flag Thu Apr 21, 2016
This is such a true statement. My daughter is paying 1100 in rent, while my mortgage, property taxes, insurance is much less than that and a MUCH bigger place.
Flag Thu Apr 21, 2016
Yes this was asked and answered back in 2010, however the topic still lives on. Alive and well, will never die. It will live forever
Flag Thu Apr 21, 2016
Has anyone noticed that this question was posted, and answered, in 2010?
Flag Thu Apr 21, 2016
It's a catch 22. Why pay a landlord's mortgage when you should pay your own? If you took a 250k home with 0 down with some wacky loan, say your interest is 4% as the 0% down loans have higher interest. Home Owners insurance is 800 (just an estimate, mine is 1900 but I have a large home), Property tax is 1.5% (could be more or less in your area) you're talking about a 1777 a month mortgage payment even if you put 12.5k 5% down, it's still 1670 or so. Same numbers for a 125k home with your 8% down would still be around 820 a month. Big variables would be home owners insurance and property tax. 1.5% is pretty low but a good estimate to start at unless you live in NJ or close to some metro area.

When you say you'd be paying 500 a month plus utilities, what is that based on??? Is that renting or a mortgage???
Flag Thu Apr 21, 2016
Do your homework. It's a mistake to oversimplify the cost of ownership. There are many things you will be responsible for when you own the property that are not your concern when renting - especially if you purchase a lower-priced property.
Flag Thu Apr 21, 2016
You also need to factor in taxes and insurance costs on a new home. You may think the mortgage is only x amount of dollars, but the other costs associated with purchasing a home add up. In many cases people will also have to pay private mortgage insurance until they can pay for a certain percentage of the mortgage. It all adds up.
Flag Thu Apr 21, 2016
I can easily voice a comment on both sides of this story. I was renting mid 70's era town house in Houston, Texas for $1100/mo. It was 2 bedroom, 2.5 Bathroom, 2 car garage. I had cable tv & internet connection and all was good. Then I got laid off. 5 months of unemployment ate through my savings and put me deep into debt. I finally got a new job but had to commute 75 miles 1 way for my new job. I ultimately started looking for a new place to live that was significantly closer to work. I ended up buying a house through a USDA 100% financing loan as the little town of Columbus TX and Weimar TX where I ended up Buying are so small, that rentals are known through word of mouth, not through relators and online listings. My House is a 1954 Ranch House on a .41 acre corner lot. 3 Bedroom, 2 bathroom, 2 car garage. Managed to steal it for 130k, and am paying $950/mo including mortgage, escrow, and interest. Since buying it, there have been numerous issues arise.
Flag Thu Apr 21, 2016
Yes, but your model assumes that you will not lose your job, you will not lose your health, the economy will not downturn, you will not be subject to unfortunate natural occurrence, and utility prices will remain the same. Plus, presumably, you are not responsible for potential maintenance costs if your rental unit needs a new roof.

I am in the same position as you, renting and seeing mortgages for much less per month, but stability and contingency are things that you cannot calculate or account for. The cost of home ownership is far more than what the hard numbers tell you.
Flag Thu Apr 21, 2016
Jason, Home Buyer, Cincinnati, OH
Thu Apr 21, 2016
I bought my home with no down payment. Best thing I've ever done was get to ownership and out of renting. The thing is, you'll pay more because for a good chunk of time during the mortgage you'll be paying mortgage insurance, which in my case happens to be $85 bucks to the bottom line of my mortgage. If you can do it and keep it, go for it. Also get with your realtor and see if there is any programs in your area providing grants. I was able to secure 10k by taking 2 home ownership courses in my county.
5 votes
elvislicul, , Syosset, NY
Thu Apr 21, 2016
Laura,
Please don't take this personally but,you are a renter,not a buyer.
You cannot buy a house without a substantial down payment,and about $5k in reserve for repairs and maintenance.
You should also have about another 3-6 months in reserve for your mortgage if you lose your job or get sick.
Every realtor and mortgage broker will find a way for you to buy a house-ignore them-they only make money if you "Buy" something.
Everyone that bought a home with $2000 before the housing crash has lost their home and is now waiting out their 7 year bad credit rating-Everyone without exception that bought a house with no money has lost it.
Your good credit will not help you one bit if you get sick,lose your job and have to sell your home.
You will not have enough equity to cover all of the costs in selling your home-You will be underwater,and you will be foreclosed on.
You cannot buy a house with $2000.
You are a fool if you listen to someone who tells you otherwise.
5 votes
The statement that "Everyone that bought a home with $2000 before the housing crash has lost their home and is now waiting out their 7 year bad credit rating-Everyone without exception that bought a house with no money has lost it" is utter bollox. I bought a house with zero down before the housing crash. Even rolled the closing costs into the mortgage payment. I didn't want to put any savings for a down payment, but I knew I had a steady job with no downside, and I was able to easily afford the monthly mortgage payment. And if things went belly up, I had my savings to get me through. It's all about cash flow and opportunity cost of money, in the end. If you can afford your monthly payment, go for it. It will end up being more than if you made a down payment, but I would rather put that money in a long-term investment yielding 8-9% annually (the average stock market return is 10.7%, by the way) than to pay down money I am borrowing for 4-5%. A no-brainer.
Flag Thu Apr 21, 2016
And if you continue to rent and lose your job and cannot afford to pay the landlord you won't be evicted? It takes a lot longer to foreclose on a house than to evict a non paying tenant. I recommend finding a modest house in good condition (hire the best home inspector) to minimize any unforeseen costs and go for it....no need to pay a landlord what you can pay in a mortgage, taxes and insurance. Don't forget that mortgage interest and taxes are tax deductible....rent isn't.
Flag Thu Apr 21, 2016
That is flatly false. We bought into the market you are talking about, with nothing down, and we lost NOTHING in the crash. As long as you can make your payment with steady income, you aren't losing a thing. And then the market came back and we sold for far more than it was even worth. I don't know where you got your thought, but it's not close to reality.
Flag Thu Apr 21, 2016
"Everyone that bought a home with $2000 before the housing crash has lost their home and is now waiting out their 7 year bad credit rating-Everyone without exception that bought a house with no money has lost it"... what the hell are you even talking about??? MANY have bought homes via FHA, USDA, and other buying incentives, having little to nothing down, and are doing wonderfully. I'm one of them. And to boot, I've got almost 45% in equity in 6 years. Research before you speak like you know what you're talking about. As many have vented before me, you have no clue.
Flag Thu Apr 21, 2016
"Everyone that bought a home with $2000 before the housing crash has lost their home and is now waiting out their 7 year bad credit rating-Everyone without exception that bought a house with no money has lost it."
While I would steer people away from buying a house when they don't have money saved up, this statement is blatantly FALSE. Crawl back under your rock...
Flag Thu Apr 21, 2016
Bought my first home in 2000 with 3% down via FHA. Fortunantelty the house went up in value and we made improvements along the way Two years in, we had enough equity to do a streamline refinance and get rid of PMI saving $150 when you factor in the lower interest. Sold the house in 2006 for 210% of the original price. Bought another home (in another state) and put 30% down.
Flag Thu Apr 21, 2016
elvislicul... You are 100% wrong. One can easily buy with zero down thru FHA VA or USDA... It's called "seller consessions" ...which is exactly how I bought my home last year with zero out of pocket..and I'm doing GREAT!!!
Flag Thu Apr 21, 2016
What a crock! Lots of people have bought homes with zero down, and lots of them still have those homes. Do your homework, crunch the numbers, and be sure to include a cushion for repairs and unexpected occurrences. If the numbers make sense, and if you feel your income is fairly dependable, then start looking for what you want. Don't let a real estate agent talk you into spending more than you feel comfortable with, and hold out for the right property, in the right location, for the right price. Pare down your expenses as much as possible, without living under a bridge, and save up as much as you can while shopping. Then keep those habits after you've bought a home, at least until you've saved up a comfortable nest egg. And most of all, make sure it's your plan. Don't let family, friends, coworkers or real estate agents sway you from having the home you want.
Flag Thu Apr 21, 2016
I must be a fool, then, because I purchased a beautiful 3 bedroom home 6 years ago with no money down, and am doing just fine with it!
Flag Thu Apr 21, 2016
Seriously? I bought my house with $500 down, and closed with $1956!!!! I have a really nice 3 bdrm, 1 and 1/2 bath home with a 1 car garage, fenced back yard, sprinkler system on a well - I can go on and on. What I did NOT do was buy what I qualified for: an $80 or $85K house. I shopped carefully and bought a house that I can afford when I collect social security in a few years. So I must be "nobody" because I still own my home.
Flag Thu Apr 21, 2016
Thank god! Finally, someone with a common sense! God bless you elvisliscul!. American dream is not all about owning a home and having a dog. Not everyone should be a homeowner.
Flag Thu Apr 21, 2016
What an ignorant comment that "Everyone without exception that bought a house with no money has lost it." False! I can agree with many of the points made, but this statement is absolute hogwash.
Flag Thu Apr 21, 2016
alisamonian, Home Buyer, San Diego, CA
Thu Apr 21, 2016
I did! Four years later, I'm still here and in better financial position with equity in my home. Seller covered closing costs, I found a down payment assistance program to help with 3%. I was able to re-fi a few years later and pay that off. I had a steady, good job and bought in an area where values were increasing. Just do your research and be honest with yourself about your financial situation.
4 votes
No money down!!! Yes, My wife and I did it almost 11 years ago at the shore in NJ. Most people did not believe it. It is okay. We both have stellar credit, good paying jobs, and some money in savings. I believe it was mostly related to great/outstanding credit, no debt and good pay checks that allowed that opportunity. We still live at the shore, and paid off the smaller piggy back loan over 6 years ago. That is what would have been considered the down payment amount if we had used a conventional plan. It was all good and I am glad that we didn't use a down payment. While we are still here, the price home is way less value then what we bought it for. It does work.
Flag Thu Apr 21, 2016
I bought my house, got a grant and agreed to live here for a minimum of 5 years. The grant is how I was able to purchase a house with 2k in savings. On closing day I had 400 of that 2k left But I bargained for the seller to pay a year warranty on the utilities/appliances so if anything broke it was only the service call fee of $50 that I had to pay. This I a great option if you factor rent and all utilities and are paying more than owning a home (Utilities, mortgage, taxes, insurance etc.) I bought a house below what I was approved for as well. I was laid off 8 months in so I had to scrambled for a new Jo, luckily by then I had saved just enough to make it 1 month and would have received unemployment. Just be aware of the risks and honestly talk through things with your financial advisor or realtor. A year into homeownership and I've got more in savings than when I started the house hunt. Worth it? In my case, yes but its a case by case basis.
Flag Thu Apr 21, 2016
Teresa Delue, , Jacksonville, FL
Thu Apr 21, 2016
Yes! First-time homebuyers in Florida who qualify for the Florida Bond Down Payment Assistance program can qualify for up to 15K in FREE MONEY to be used towards your down payment and/or closing costs. I have had several borrowers under this program close with $0 out of pocket at closing. Call me an I will see if we can get you qualified! 904-528-2106
4 votes
can help me to buy cheap house cash
from 20000 to40000 $ and thanks
Flag Fri Apr 22, 2016
Mary Snyder, Home Buyer, Windham, NY
Thu Apr 21, 2016
Don't do it! If you don't have the money for the down payment, you will not have money to fix things that break or need replacing in your future home. Save at least 10% for a down payment plus closing costs. If you really want to buy a place, then rent a cheaper place, get a second job, pack lunch vs going out, postpone vacations for awhile, stop buying things you do not need. If you REALLY want to buy a house you will find a way to save the money you need. Good luck! I know you can do it :)
3 votes
Mary Snyder, that's really not entirely true. As a renter who has NO luxury items (we don't eat out, have cable, etc etc etc) -- we are trapped by renting. Our rental price, which is great for our area, is nearly triple what we'd pay for a house -- AND we are required to pay for certain things. We are both handy -- I helped my mother repair her home and my husband is a plumber. If we owned, we could further reduce our costs by investing in the property. But we can't, so we're just throwing our money away. Investment matters! People assume that saving is easy, but those of us with student loan debt and medical expenses live in a VERY different world. Can it still be done? Sure. But not the way you think
Flag Thu Apr 21, 2016
Don't forget the investor will charge you a monthly PMI fee too !! Mortgage Insurance, that is.
Flag Thu Apr 21, 2016
Hampshireori…, Home Buyer, Granby, MA
Thu Apr 21, 2016
Depending on the area in which you live/ are looking. You could look into USDA direct or backed loans. I make too much money for their direct loan but we qualified for their backing. This is allowing us 100% financing. We can ask for an X amount of allowance in our offer and get that money back at closing or something to that point. Basically I have been told by my loan officer and my agent that we will likely be out of pocket under $1000. Look up on google, usda rural development loan and follow to the USDA website. You should find enough information there.
2 votes
jodyramey1, Home Buyer, Belle Vernon, PA
Thu Apr 21, 2016
The only people who should buy a house with no money down, are the people who have enough money to put down and don't want to use their cash, have an established successful relationship with a lending institution, a solid balance sheet, and a financial advisor!

Otherwise, I would recommend you watch The Big Short.

And though Dan makes some excellent suggestions, usually those with no money, aren't willing to stop "living" to get there. (that would have been me a long time ago)

I suggest something that most people today forget.. And it was so common not too long ago. Get a 2nd job. You" ll be too tired for the $1 soda. Bank the entire amount.

Make more. Spend less.

Enjoy your new home!
2 votes
Vineet Handa, Home Buyer, New York, NY
Thu Apr 21, 2016
Hi Laura, I read through the advice & comments here, so let me give you a different perspective. (1) Loan - You get loans today with 5% down (Conventional not FHA but through internet only banks - try Zillow mortgage section) (2) Loans - Do check difference between FHA & Conventional loans. (3) How SECURE is your job - Are you salaried, hourly. How stable is your company. Give a long hard look at your job situation. (4) Also how is your spouse's job. Same thing - is it stable and secure. Look at industry he's working in. Some jobs are more secure than others. Think Retail stores shut-down, manufacturing plant shutdowns, Government jobs - never shut down; that kind of hard look. (5) Basically # 3 & 4 will define whether you can and should go ahead with less down-payment. (6) How is your credit score. Go online at http://www.creditkarma.com and check it...If it says less than 680, you will get higher interest rate loans and it should also tell you that you are not great at managing your finances. It's definitely a red flag. (7) How are your credit card balances - Do you have any outstanding balance. Does any of your credit card give you option of 0% APR. So, if you're hit with an expense like $4000, can you pay it through with card & pay the credit card eventually in 6-8 months without paying much interest. (8) How are your monthly expenses - can you cut-down on some of those (9) do you have kids - are their expenses going to go up or down like daycare, school, college, NEW Baby, etc (10) Since your question was - Can WE buy a house so I assume you've a spouse. So is your spouse in it with you. Lot of times that causes an issue later on.

Rest lot of good advice in comments, I would suggest read em all. Go to Zillow.com >> Find House that you like >> Hit Mortgage section >> Customize your info like credit score, salary etc & it gives you a mortgage quote. Look at expenses in quotes (Property taxes, Home insurance, escrow, fees, -- only thing it will not tell you is supplemental property tax but you can research it & find out exactly your home ownership cost. I won't say buy or not buy. Each situation is different. Best of Luck
2 votes
I dont know why it says Home buyer in NY against my name.. I own a townhome in Orange county, California.
Flag Thu Apr 21, 2016
Deborah Jaco…, Agent, REDLANDS, CA
Thu Apr 21, 2016
You can buy a home with a USDA loan if the home is in an area where the loans are available.
Check the USDA website for terms and conditions. My mortgage company, Guild Mortgage, in San Diego, can point you in the right direction.
Web Reference:  http://m.mvcard.me/baxter
2 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Sat Jan 23, 2010
Hi Laura,

Must say I agree with Debbie. Home ownership can be a big risk and based on what you've got saved you could well find yourself in trouble again. Save up for a few years and try again.

All the best, Mark
2 votes
Don Tepper, Agent, Burke, VA
Fri Jan 1, 2010
Dan's right. The question isn't whether you can buy a house. The question is whether you could keep it.

There are dozens of ways to buy a house with no down payment. VA is one. There are rural areas in which you can get 100% financing. Find a home with owner financing. Or go the lease-option/lease-purchase/land contract/contract for deed route. Or do an equity-share arrangement with someone with money. Buying a house with no down payment is the easy part.

But when you come to the first financial bump in the road, what'll you do?

By the way, Dan understates the cost of the can of soda. That $1 can really will cost you closer to $2.25, and probably more. Reason: As he notes: "You now have to MAKE another $1 to replace it." To end up with $1 in your pocket--after federal income taxes and state income taxes--you really have to earn (depending on your tax bracket) around $1.25. Then there's the lost opportunity cost of the $1. Maybe you could have taken a bus to a job interview and gotten a higher-paying job. Maybe you could have bought a newspaper and picked up some tip for saving a few dollars . . . or just some money-saving coupons for things you really needed.

So: Build your savings. Improve your credit. There will be plenty of homes--and plenty of bargains--when you're ready and able to buy.
2 votes
Mack McCoy, Agent, Seattle, WA
Fri Jan 1, 2010
You can buy a house, although it's not such a good idea for someone with no cash reserves. There's not much risk, certainly - the worst than can happen is that you lose your job and they come and take your house and your credit is wrecked - but it wouldn't cost you very much money!

Still. $2000 is chump change - no offense, but it wouldn't buy you a new transmission for your car, would it?

Start saving some dough, will ya?
2 votes
While I agree with the sentiment of this posting, if you were to buy a house sooner rather than later, you would only be taking a risk for the time it would take you to build up your savings. So the questions you would need to ask yourself are 1) "How much risk can I tolerate emotionally?", and 2) "Would I rather be paying down my mortgage or my landlord's mortgage while I'm building up my savings?". If your mortgage payment will be the same or less than you currently are paying in rent, and you have been able to put money in savings so far, you should be able to continue to add to that savings. Provided that nothing catastrophic happens in the first few months of home ownership, it's all uphill from there.
Flag Thu Apr 21, 2016
Amorris72200, Home Buyer, Harpswell, ME
Thu Apr 21, 2016
A lot of states (like Maine, where I'm from) has what they call an RD Loan, no money down, 30 year note, with current fixed rate. And if you can convince seller to pay closing costs, and put you home owners insurance and property taxes into escrow, you can be pretty set up!
1 vote
Cwitt11, Home Buyer, Garden City, ID
Thu Apr 21, 2016
Laura,

You may still be able to buy a home, depending on the programs your local State/City have.
In my State of Idaho we have programs that can help you with down payment assistance.
Contact me and I will find you a Realtor in your area that knows about these programs, or
will find this info out for you.

***If anyone else is interested in what programs your State offer, please contact me also, and
I will find out for you **

Carrie Witt
Equity Idaho Realty
wittcarrie@gmail.com
208-861-3540
1 vote
Robinj, Home Buyer, Petersburg, VA
Thu Apr 21, 2016
The original post that I'm responding to is over 6 years old. However, for those who are looking for answers, please research http://www.naca.org. NACA is the Neighborhood Assistance Corporation of America. They offer no down payment, no closing costs, no points, and offer mortgages regardless of credit score. You MUST attend one of their nationwide home buying seminars (4hours) in order to be eligible to start qualifying with them. "Started in 1988, NACA has a tremendous track record of successful advocacy against predatory and discriminatory lenders as well as providing the best mortgage program in America with $10 billion in funding commitments. NACA is the largest housing services organization in the country and is rapidly expanding by growing its existing 30+ offices, headquartered in Boston, MA, opening many new offices nationwide, and expanding the services it offers its membership. NACA’s confrontational community organizing and unprecedented mortgage program have set the national standard for assisting low- and moderate-income people to achieve the dream of home ownership."
1 vote
Looks like the website included the period in the web link. It is http://www.naca.com
Flag Fri Apr 22, 2016
The correct website for the Neighborhood Assistance Corporation of America is http://www.naca.com.
Flag Fri Apr 22, 2016
https://www.naca.com/ goes to Neighborhood Assistance Corporation of America
http://www.naca.org. goes no where
http://www.naca.org goes to National Association of Campus Activities
Flag Thu Apr 21, 2016
web site does not work?
Flag Thu Apr 21, 2016
Jesse Allen, Agent, Greenville, NC
Thu Apr 21, 2016
Laura,

I would suggest you seek out all your choices. First I would find myself a good Buyers Agent to assist you in the process. A buyers agent will be familiar with all the financing options for your area. Here in North Carolina we have several options to help buyers with little or no down payment. Have your Buyers agent explain to you the ones that might work best for your area. Good Luck! Its a Great time to BUY!
1 vote
sandavc, Home Owner, Sanford, ME
Thu Apr 21, 2016
Since 1988 we have purchased four homes in four different states with no down payment or closing costs. We rolled the closing costs into the mortgage loan and, in one case, the seller helped with closing costs. We did not have money in savings either. All of our loans were 30-yr fixed rate, and one of those was a V.A. loan. Happy house hunting.
1 vote
In addition, the four homes we purchased were new homes so the the concern re "fixing things" was nil.
Flag Thu Apr 21, 2016
Dawnk3278, Home Buyer, Columbia, SC
Thu Apr 21, 2016
HI...13yrs ago in WI I was able to buy my 1st house and qualified for AmeraDream program. All closing costs were added to my loan. 58k, and I only had to come up w/$700.00 note too they take your income in consideration for assistance
1 vote
Dawn9197, Home Buyer, New Haven, CT
Thu Apr 21, 2016
There are programs for first time homebuyers that offer downpayment assistance thats how I was able to purchase my home. Look into what is available where you live.
1 vote
Angela, Home Owner, Arlington Heights, IL
Thu Apr 21, 2016
Laura, wanting to buy a home is a good and noble idea. I want to share some experiences with you to give you an idea of what homeownership is like for my husband and me. I did not realize how expensive it was to own a home until I signed on the dotted line. Every year since we have owned our home, we have had a big-ticket repair of some sort. One year, we needed a new roof and it was 3,000 dollars to put it on. Another year, our basement flooded and we needed to replace all the drywall, carpet and we had to repaint. That cost us 2,000 dollars. Another year, we got a crack in our foundation and it was 4,000 dollars to repair it. Another year, almost every appliance in our kitchen broke and replacing them cost thousands of dollars. I came to the conclusion that homeownership is an undertaking that requires a lot of cash reserves. You can just expect to be paying for things like that year after year. If you do not have the money for a downpayment, where will you find the cash for the things that go wrong? Those annoyances become emergencies when there is no money to cover the cost. When you are renting, the landlord covers the cost of those things. Good luck saving up for a home and be sure to always keep a cushion of cash for home repairs once you find your home.
1 vote
FYI home owners policies don't cover flooding (unless a result of a plumbing issue). Right now I have 4 feet of water in my basement from the extreme rains in our area. If it damages anything, my homeowners insurance won't pay anything. I have to pay out of pocket for the cleanup and pray for no mold. Flood insurance is expensive.
Flag Thu Apr 21, 2016
Daniel Grub, do you own a home? Home owners insurance covers some things as a result of catastrophic events, but not most regular expensive home repairs. Even if it is covered under your home owners, depending on the value of your home you're looking at at least $1000 deductible before the start paying anything.
Flag Thu Apr 21, 2016
homeowners insurance? Seems like all that would have been covered except for your appliances
Flag Thu Apr 21, 2016
home owners insurance
Flag Thu Apr 21, 2016
Jeni Temen, Agent, Reno, NV
Tue Apr 19, 2016
In Nevada we have several local government grants that help with downpayment. It has income limits but It helps a whole lot. Check and see if your local housing authorities have any grants. I would bet Florida has some too.

Jeni Temen, Realtor in Nevada.
1 vote
Dp2, , Virginia
Sat Jan 23, 2010
Although I agree with Dan, Don, and several others, I'd like to take a moment to explore the lease-option. A lease-option might work perfectly for you for the following reasons: you don't have enough money (for a down-payment or in cash reserves), you'll fix your purchase price in today's pricing, and a portion of your payment will be applied towards the purchase price (just as a down-payment would be).

Another option that you might not have considered is to purchase a mobile home or manufactured home. Your $2000 might be enough for a bona fide down-payment, and it might also give you sufficient cash for closing costs and cash reserves.
1 vote
John Bennett, Agent, Orlando, FL
Fri Jan 1, 2010
Laura, don't push the limits.

Find you a good Loan broker and plan VERY carefully.

John
1 vote
Donnakodes, Home Buyer, Miami, FL
Sat Sep 2, 2017
I need something in western mass
0 votes
Donnakodes, Home Buyer, Miami, FL
Sat Sep 2, 2017
I need a 2 bedroom house my credit is not good i need something with rent to buy option with little or no money down.
0 votes
LawrenceIMor…, Landlord, Brooklyn, NY
Tue Aug 22, 2017
Hey Laura- I have consulted people looking to buy in your general area. Seller's can pay some of your closing costs, and you'd be surprised what you can buy for $70k-90k in the Miami, FL area. With a few more months of saving, I bet there is a path forward for you. Currently, however, it is difficult to answer your question without more information.

Feel free to take a look at my consulting site lawrencemorris.info . The testimonials page is a great place to go to after the home page. You might just find that the consulting service I offer is the right place for you to start to answer your question and clear up what you have to do to go forward with your first home purchase.
Web Reference:  http://lawrencemorris.info
0 votes
LawrenceIMor…, Landlord, Brooklyn, NY
Tue Aug 22, 2017
Hi Nancy,

I have consulted people looking to buy in your general area. Currently, it is difficult to answer your question without more information however. Feel free to take a look at my consulting site lawrencemorris.info , however. The testimonials page is a great place to go to after the home page. You might just find that the consulting service I offer is the right place for you to start to answer your question.

All the best,
Lawrence
0 votes
Jessiecalixt…, Home Buyer, Miami, FL
Mon Aug 21, 2017
i don't know maybe you'll get one
0 votes
Asajitha10, Home Buyer, Miami, FL
Wed Jun 7, 2017
i want to buy a house but i don't have money , my partner is no my and my child i stay with my parents, But i take own home in my dream
0 votes
Bonnie Harris, Home Buyer, 37072
Thu Jun 16, 2016
you can borrow more money from the finance co. if the home will appraise for more than what the owner has ask for it
0 votes
Five Stars, Other Pro, Jacksonville, FL
Thu Jun 16, 2016
FHA is a good option in Miami. The home seller can pay your closing costs for you as part of the offer, so you only need 3.5%

Five Stars Mortgage
Florida Loan Resource
7 days week - 9am-8pm
0 votes
C.g.vanhoutte, Home Buyer, Miami, FL
Sun May 1, 2016
You can buy a home in baltimore from a bank or baltimore city from $100 to $1000. Most banks will give you a list of homes they have that are in that price range and the mayors office sells a list of recent and pre-tax forclosures, the list is $75. People default for various reasons un paid tax bills unpaid water bills an elderly person goes into long term care or hospice and has no living relatives to inherit the property.
0 votes
I bought my home for $15,000 in turn key condition.
Flag Sun May 1, 2016
Benardmark00…, Home Buyer, Atlanta, GA
Sat Apr 30, 2016
Simply take an unsecured loan from a legitimate company a a very low interest rate lets say 2% - 5% IR, My wife and I just bought a house, it was all through a loan of 3%, we are currently repaying every month end without hassle.

You can contact me for more info on how i got my loan.
benardmark0001@gmail.com
0 votes
Benardmark00…, Home Buyer, Atlanta, GA
Sat Apr 30, 2016
Simply take an unsecured loan from a legitimate company a a very low interest rate lets say 2% - 5% IR, My wife and I just bought a house, it was all through a loan of 3%, we are currently repaying every month end without hassle.

You can contact me for more info on how i got my loan.
0 votes
William Tayl…, Agent, Dallas, TX
Fri Apr 29, 2016
Don't fall victim to only looking at what's most affordable for you today. Keep in mind that you also need to weigh it all and of the financial desisions you make will also affect you financially down the road. Just like a doctor,each person's options need to be thoroughly diagnosed before prescribing any medication. You see, you must evaluate where you will be in both the long term and short term.
Web Reference:  http://www.wilbuyshouses.com
0 votes
William Tayl…, Agent, Dallas, TX
Fri Apr 29, 2016
Don't fall victim to only looking at what's most affordable for you today. Keep in mind that you also need to weigh it all and of the financial desisions you make will also affect you financially down the road. Just like a doctor,each person's options need to be thoroughly diagnosed before prescribing any medication. You see, you must evaluate where you will be in both the long term and short term.
Web Reference:  http://www.wilbuyshouses.com
0 votes
William Tayl…, Agent, Dallas, TX
Wed Apr 27, 2016
Keep in mind that banks are in the business of loaning money, in order to make lots of money. Bankers are paid bonuses, and promoted based on the quality of the loans they approve. If they have a problem with a loan, it's usually a no go on your loan application. I advise you to work with mortgage specialists or brokers who tend to be very motivated and work hard to help you.
Web Reference:  http://www.wilbuyshouses.com
0 votes
Trulia, Agent, Edison, NJ
Tue Apr 26, 2016
You could always ask for a sellers concession for the closing costs but I would not recommend buying a house if you don't have any extra cash on hand to cover unexpected surprises / expenses, repairs, etc.

When buying a house you should never stretch yourself out or overextend yourself. What if your car breaks down or you break a leg and have a doctors bill, Which bill won't you pay?

Good Luck whatever you decide.
0 votes
Mike Baker, Other Pro, Fresno, CA
Tue Apr 26, 2016
Credit Score, Income and Time on job will impact this a lot
700+ 5 years stability and being able t show good income might make it work

Good luck Mike Baker
0 votes
Jesu49, Home Buyer, Beaumont, TX
Tue Apr 26, 2016
I would wait and save. Not only do you not have the money for a house, you don't have enough for escrow. You must have one or two months house payments in reserve. You must have the insurance paid for the year. You must have a deposit for your taxes. How do you plan to do the upkeep to your house? Simple maintenence? Say your a/c goes out or a storm takes off your roof? You insurance may not cover your a/c. You need from $500 to $1500 to pay your deductable, plan for the higher price for that. A house costs a lot of money. You should have at least $5000 in savings for emergency repairs, $10,000 is better to cover roof, a/c or other costly repairs. Just something to consider.
0 votes
Transfixusam, Home Buyer, Palm Harbor, FL
Mon Apr 25, 2016
Personally I wouldn't buy anything in Miami. Sure seems like pricing there got crazy. Buy you probably pay a huge rent so if it's a wash renting and buying do that. Risk nothing? Maybe your credit if you default, but the risk or renting for another "forever"... is not having any equity. My main fear would be a bubble bursting in the MIA market.
0 votes
eveshr7, Home Buyer, Hobbs, NM
Sun Apr 24, 2016
I do not know if the Florida has funds set aside for first time home buyer's to purchase a home. I only had $2800 and my State provided the other $6000.00 needed for closing cost and down payment assistance. I paid for the home inspections out pocket (without touching my savings) and put down $500.00 in earnest money. I had to cut back on spending, but it cost only $1500.00 for the move-in. HUD also have funds set aside for first time home buyers, some you have to pay back and some are grants that never have to be repaid, just keep trying. It is hard to save $10,000 or more to buy a home. And always ask the seller to pay a portion of the closing cost. These people's postings are depressing, there are always other ways to find the funding. Good Luck
0 votes
Ldunham, Home Buyer, Champaign, IL
Sat Apr 23, 2016
I would not advise buying a house at all when you're broke.

It's one thing to have thousands of dollars saved, and then choose to get a loan with a low down payment to preserve those savings for emergencies, but if you go into a house with zero money put aside, what will you do if the furnace/AC goes out, or your roof springs a leak, or hurricane waters rush under your front door from a flooded street? (The homeowners insurance the bank will require you to get doesn't cover flood damage.)

I can almost guarantee that within six months of moving into a home you will either find something that needs to be fixed that you didn't notice on your pre-purchase tours, or something significant will break that wasn't broken when you bought the house.

If you don't have enough set aside to pay cash for those repairs, in addition to your down payment, I think it would be really unwise to buy a house right now.

That said, there are some zero-down mortgage programs.
http://www.bankrate.com/finance/mortgages/4-mortgages-that-r…

Most of them charge fees, and your monthly mortgage payment could be $100-$200 higher because of the fees, so the same house will cost you significantly more if you don't put 20% down.

Even with the low down payment programs, I would recommend putting at least 10% down so you have some immediate equity in the house. As volatile as Miami housing prices are, you could find yourself upside down in the house, owing more than you could sell it for, if you wanted or needed to move when prices had dropped--when the bubble burst in 2007, Miami home values dropped by 15% by 2008, and another 30% by 2009.

Hope you find the house of your dreams, and that you can own it, but hope you won't let it own you.
0 votes
Nick Gray, Home Owner, Rocklin, CA
Fri Apr 22, 2016
It is difficult to get a loan with nothing down. Lenders think that, if you have nothing at stake, you might just walk away and leave them "holding the bag" if your financial situation gets rough. However, it may still be possible, but you will have to pay for PMI (Private Mortgage Insurance) to insure the lender against a large loss. I suggest contacting a good mortgage broker, who knows what lenders are likely to provide you the loan you need. Of course, it would help to have a great credit rating.
0 votes
Paul, Both Buyer And Seller, 11968
Fri Apr 22, 2016
Let InBedrock.com help you answer the Rent v Buy v Invest question for yourself and your unique situation re: Your monthly rent expense option v house purchase price You would like to buy + all its associated costs like closing/title/mortgage interest/RE taxes/HO insurance/utilities + maintenance costs/broker selling commission/capital gains taxes/and more! InBedrock.com is educational, in-depth, and easy to understand for first-time homebuyers.
Web Reference:  http://InBedrock.com
0 votes
Jadonphutchi…, Home Buyer, New York, NY
Fri Apr 22, 2016
Just because you qualify for a mortgage does not necessarily mean you should buy a home. There are lots of factors in the decision. You can get help with the downpayment and even request seller to pay closing costs but if you aren't able to save money now does the addition of a mortgage payment (if more than rent) and property maintenance cost to upkeep a home really make sense financially? You are the only one who can make the decision. I believe you can probably make the payments if close to rent but if the roof needs replaced how do you fix that if you don't have savings. There is no equity to borrow with no money put down. Plan for the unexpected and hope for the best
0 votes
NACA Online…, , Charlotte, NC
Fri Apr 22, 2016
NACA is a true no down payment, no closing cost program. There is a a certain amount of savings needed for prepaids like inspections, initial property taxes and homeowenrs insurance, and one or two months of mortgage payments in reserve, but your $2000 may cover that depending on the price of the home.

There are also many down payment assistance programs out there to provide funds for the purchase of a home. With NACA those funds are used to buy down the interest rate, which is a much more efficient use of the funds compared to a traditional down payment.

More information is available on the NACA website at http://www.naca.com .
0 votes
Glenn24, , New York, NY
Fri Apr 22, 2016
In addition to the other advice here, I think you should also consider a rehabilitation mortgage. Also known as a 203k, these mortgages allow you to finance the renovation of an older home with little to no money down. They are complicated because you need to have approved contractors and approved renovation plans, but the right mortgage lender could help you with this.

The down side you experience is moving into a house that had a lot of work going on, but the good side is that all the repairs are done as part of the mortgage. It could be a s little as 15000 of work on a house and still qualify.
0 votes
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