My husband and I are first time buyers.

Asked by Kathryn Miller, Indianapolis, IN Mon Nov 3, 2008

What do we need to have in order to get a house in the next few months? My husband insists that we need a 20% downpayment and another $5000 set aside for closing costs. But I have heard of people getting into a home with around 3-5% down.

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Erik Armstro…, , 47802
Mon Nov 3, 2008
Kathryn Miller,

Looks like you have some solid advice from the local REALTORs already so I'm not going to repeat the same advice is. just don't listen to "NON REALTOR", "Just Looking" from the USA. Listen to the advice of a REALTOR who makes his or her living in the area you are interested in.

"What if you loose you job?"...seriously?

If you have 20% down congradulations you can afford a better house. If you don't then, "YES" you can find an FHA loan that allows you to only put 3-5% down.

It's a buyer's market right now and we don't know how much longer it will last. Interest rates are good now. In six months they could be lower but I believe they will be higher.

Erik Armstrong
Century 21, REALTOR
0 votes
Pete George, Agent, Carmel, IN
Thu Nov 20, 2008
Hi Kathryn,

It's as simple as this. If you can qualify for a loan right now, as stated by others below, an FHA (Gov't backed) loan is the way to go for yourselves, first time buyers.

All you need to have is 3% of the purchase price for the down payment.
You can ask the seller to pay all of your closing costs, and in this market they usually will conceed to at least some, if not all of it. All my clients have been going that route.

If you want to buy a house for $100,000, all you need is about $3000 in cash.

Also, right now if you buy in Indiana you can qualify for a 1 time $5000 tax credit. Ask for details on this. This is only available to first time buyers in Indiana, and it expires early next year.

Hope this helps!

Pete George
Century 21 Scheetz - The largest and top selling firm in the state of Indiana
317-702-2881 - Cell
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0 votes
Brittany Sim…, , Columbus, OH
Thu Nov 6, 2008

At this time the downpayment for FHA financing is 3%. There will be an increase to 3.5% in coming months.

This will be your best option for the lowest rate with the least amount of money down.

Check for first time home buyer programs in your area also. There may be grant or bond money available through the state or below market interest rates.
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Brad Osborne, Agent, Greenwood, IN
Thu Nov 6, 2008
Mrs. Miller,

If you have the money my advise would be to put 20% down and do a 15 year mortgage. You will have your house paid off so much earlier and have equity right away. If I were your Realtor I would ask for closig cost asssitance if you were comming with 20 percent down. 5K is a good number for closing costs especially if you are not asking for assistance. I appauld you husband for wanting to put down 20 percent. Make sure you talk to your mortgage rep about a 15 year loan. Also please call me with any other questions

Brad Osborne
Coldwell Banker
Office 317 883-3333
cell 317-258-3651
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Marita Topmi…, Agent, Indianapolis, IN
Mon Nov 3, 2008
Hi Kathryn, I'm just popping in for a peek before hitting bed so I can vote in the :am. But I see you've asked
a very good question and one that I have heard from several people in the last couple days. To own a
home that will qualify for an FHA loan, my Dad was Director of FHA for 20 yrs, you need only put down 3.5% of the purchase price. Closing Costs typically run 3% of purchase price. However, I have negotiated
for the seller to pay the closing costs for my buyers many, many times. You are probably hearing
financial consultants saying this is a great time to buy a home. It certainly is. Everything is in
your favor - a buyer's market and low interest rates. If you would like to meet me and talk over a cup of coffee, or walk through a few homes together, give me a call. Best of Luck, Marita Topmiller 513-4652,
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Jackie Pulca…, , New York
Mon Nov 3, 2008
Hi Kathryn

You may certainly qualify for an FHA loan, which requires a 3% of your own funds into the transaction, which may be gifted. (This will be going up to 3.50% in January) In addition, USDA loans allow for 100% financing, based on property and income eligibility. There are many areas in Indiana that are eligible.
Both loans allow for seller assistance towards closing costs.

Please feel free to contact me and I will let you know which loan you qualify for. I am a direct endorsed HUD underwriter and have been doing government loans since 1992. It would be a pleasure to assist you in meeting your finacial needs.

I wish you and your husband good luck! There are many good deals out there.

Jackie Pulcano
United Mortgage Corp
0 votes
NonRealtor, , 23456
Mon Nov 3, 2008
Maybe you can save your money and wait another year to buy. Prices are still declining. What if you lose your job? The economy is not looking too good. What if you put down 20% and the house loses 20% in price? Good Luck
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Dan Baize, , Indianapolis, IN
Mon Nov 3, 2008
Part of the answer depends upon where you wish to live. There are still some 100% programs for first time buyers available at fair rates with no tricks for homes in Marion County. There a very few 80/20 loans that rates are not nearly as good with and you would more than likely need closing cost, those cost can vary from $3000-$5000.
Right now I don't know if I can help you or not, however if you can give me about 25 minutes of your time to help you clarify your goals and what is important to you, you will then have a place to start, whether you work with me or another Realtor. The there is still FHA 97.5% and seller paid closing cost, in fact for HUD bank owned homes there is currently a $100.00 down program for first time buyers.
Best of luck,
Dan Baize
CENTURY 21 Realty Group I
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Tino Martinez, , Illinois
Mon Nov 3, 2008
You are correct, you can get a loan up to 97.75% Loan to value as a first time homebuyer through the "FHA First Time homebuyer program ". Seller can contribute up to 6% of the loan amount in closing costs. This all depends on your credit scores and debt to income ratios.

I would be happy to answer all your questions.

I have over 21 years of experience in the mortgage lending business.

Tino Martinez
FCM Direct Lenders.
0 votes
Eric Karrfalt, Agent, Noblesville, IN
Mon Nov 3, 2008
Yes, 3-5% down is attainable depending on your credit, income and reserves and is pretty normal. Now you are in good shape if you put 20% down since it eliminates mortgage insurance. MI is paind on all loans with less than 20% down to insure against a statistical default rate. FHA will allow 3% down and allow the sellers to pay your closing cost on your behalf up to a certain percentage of the sales price. So lets say you are buying a $100k home. You need $3000 for your downpayment and could ask the seller to pay $3000 on your behalf for closing costs escrows, etc. Now you would probably pay full price at $100k to do this. By asking the seller to pay $3000 you are essentially offering $97,000. This is just one quick example of low down payments. There are a multitude of programs to finance a home. Which one is best for you? Ask for advice from real estate pros and mortgage pro's. Good agents and mortgage reps should be able to present a few options for your circumstance, be able to break out all costs, and be able to explain why one program might be better than another. Depending on what type of home you are looking to purchase will have bearing on what type of loan you are getting. Repo, new construction, fixer upper, custom built? All these types of homes may have a more deserable type of financing. I would be happy to help. Review my profile and see if we might be able to start a professional realtor/client relationship. -Eric
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Mariam Rahma…, Agent, Indianapolis, IN
Mon Nov 3, 2008
The first step is to begin working with a realtor...the realtor you choose should be very knowledgeable about the area you are interested and understand all of the dynamics of the process, inlcuding the all important negotiating. You can share your likes and dislikes with your realtor and then begin to receive properties that I hand pick that match your criteria and fit in your price range. Chase has been providing very competitive rates lately, I refer Chad Fallis with Langdon Mortgage 844-2250. It is wise to contact a mortgage lender/bank in the early stages so that you can set your price 'comfort' range. If you could send me your search criteria we can begin... (feel free to review my website). I look forward to hearing from you and hopefully assisting you!
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