20% downpayment not ready. Any other options in CA state ?
Hi Blinders, First time home buyer here. planning to buy atleast 3 bedroom home in LA or Orange county for upto $750k. Are there any programs to put less than 5% downpayment. If yes then what is it. Please share your experiences.
FHA loans can do less than 5% depending on your credit. If not, check with your state or local community to see if there is cash assistance available for first time home buyers. Many states have them.
FHA’s loan limits are likely less than 700 even in LA. Edit: jk, 726k for 2019. Big increase this year from 680 previously.
Check out Sofi
lol, taking out a loan to qualify for a loan. That should be a sign.
Some people have done a second to get the money for down pymt. My friend did a loan for his house through them and did less than 5% and didn’t have to carry PMI
Not sure if they have this in US but ask a couple banks if they accept sweat equity as part of the downpayment. In Canada they allow this and the banking practices there are far more strict than the US. The concept is that you pick a place and get some quotes on some labor around the house you can do to improve the asset. Then you have to commit to doing that work recording your own amount of labor within the first x months of moving in.
Bottom line, if you don’t have 5% you’re not ready to buy a home. Get to 20%!
This. You're a "first time home buyer" not owner, and clearly cannot afford it if you dont have 5-20% DP. What's the rush? The correct answer here is rent, then buy when you can actually afford the 20% and insurance and taxes and annual maintenance costs and everything else that comes with owning a home in CA. In fact CA RE has stabilized and in some places declined a bit, so waiting might get you a better deal as you accumulate cash.
Absolutely this. Unless you found an incredible deal (you didn’t), there is absolutely no reason to buy without being able to put 20% down.
Build your own home on empty lot
Move to Scottsdale and live like a king LA is the same thing except more beaches and taxes
Ahahahhaahahahahah
FHA is definitely an option. If you are buying in a place where you think you would gain good equity in the next 2 years, go for FHA because you will be paying PMI for FHA loans and that is not tax deductible. Usually PMI varies from 150 to 400 dollars depending on your down and property value. That’s a waste of money. So, once you gain atleast 20% equity on your property you need to refinance and get rid of PMI and also switch to conventional loans. It’s all a risk, we did it but it was totally worth it.
You can 10% down with two loans. One will be a higher interest rate for 10% of the equity, the other will be the normal loan for 80% of the equity.
Slow down, market is trending down in most places thanks to Trump. Beyond that there may be a correction coming. Also thanks to Trump, home ownership is not such a great deal over renting, especially in high value areas. deductions for mortgage interest and for real estate taxes are capped. In addition to whatever you decide for down payment you will also want an extra 3-5% in the bank to handle those unexpected emergencies like the furnace breaks down or you suddenly need a new roof or a major appliance goes. Don't skimp on home inspections, and don't forget to inspect the sewers if the home is anything but 5 years old or newer; generally you are responsible for everything from your home all the way to the street where it ties into the city sewer. Save save save, or sell some of those RSU's when they vest if you're in tech. If you are young, home ownership is the best use for RSUs. If you're older and already own a home RSUs are great for retirement, just sell most of them and diversify your holdings.
Can do a HELOC second mortgage, but you’ll still need at least 10%. Save up.