There is a program that works with FHA that only requires 0.5% down. On a $150,000 home that would amount to $750.00. The 3% remainder of the FHA 3.5% required down payment is financed with a second loan. Using the $150,000 purchase price, if you financed the $4500.00 down payment under this program, your payment for the second loan would be about $40.00 per month.
Let me know if you are interested in knowing more about this program!
Best wishes to you in your quest for a home!
Better bet in my opinion is to get a family member to gift you the down payment and closing costs on an FHA loan.
Closing costs can be credited by the seller, NOT your downpayment. But it can be 100% gifted.
Otherwise, wait and save. Its okay to buy next year!
Good job on getting your credit in order. That is a very important first step in home ownership. Your best bet is to go with an FHA loan program. You can buy with only 3.5% of the purchase price as a down payment. That 3.5% can be from savings, or a gift from a friend or family member. There are even HUD homes now that only require $100 down payment! They are few and far between, but might be a good alternative for you.
Is your friend a loan broker or a real estate broker? That will let me know better who to direct you to for more assistance. Thanks, Liane
I see why you are feeling you are ready to go! Unfortunately because so much has happened in the lending industry, the zero down payment programs to help first time buyers has diminished. There are few city and county programs that help buyers with their down payment but sellers aren't willing to work with those buyers, mostly because the money has been exhausted by the time the buyer needs it. VA loans are the only loans I understand to exist with no money down, although closing costs are not always paid for by the seller leaving that for the buyer. My advise would be to save. You have already talked to someone about cleaning up your debt, now build up your savings. It will make purchasing a home more exciting when you know you are relying on yourself! Budget and save! Time WILL be on your side. Good luck!