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[dennisdennis]

I live in US. I would be trying to do the loan in my name only however my fiancé of 10 years would be a 2nd income (has a recent judgment so not putting her on the loan).

I have about 7 years history in my line of work.

My credit score is about 660+. No BK. No charge off. Income is 63k before taxes. But I do have about 400 - 500 monthly debt. 1 car payment, student loan debt and some CC debt that make up that 400+.

I have not owned a house in 2+ years so I am told I may be considered a first time buyer again.

I would like to finance 100% and I am looking at houses right around 300k.

If someone would like to take on this challenge or can recommend someone please let me know.

Thanks!

[case_insensitive]

100% financing is getting pretty common, but let me warn you not to consider this if you think you might not stay in the house at least 5 years. if the market drops even a small bit, you'd be in deep trouble trying to sell the house without a bank account full of cash to help you get rid of it.

[acrimone]

100% financing is getting pretty common, but let me warn you not to consider this if you think you might not stay in the house at least 5 years. if the market drops even a small bit, you'd be in deep trouble trying to sell the house without a bank account full of cash to help you get rid of it.

What ci said.

Also -- I know a lot of people made a lot of "money" recently in their real estate, but the housing market isn't going to do another one of those 20-20-20 annual increase things for at least a little while longer.

Investing in securities or bonds doesn't have quite the same transaction costs, so really look at where you think your money might do the most good, taking into account the intangible benefits of costs of owning, of course.

[untenured]

Why would you want to finance 100% of the purchase?  This implies that you don't have two pennies to rub together to find a house.

This is very risky.  If anything unfavorable happens to the real estate market, interest rates, or your job ... you are dead in the water. Besides that you will be paying interest for a gazillion years and never get out from under the mortgage.

Why not buy a house you can actually afford?

Untenured

[clean]

At 6% a $300,000 loan would be almost $1800 a month.  That is before taxes, insurance, and you will be required to have PMI (private mortgage insurance).  I dont know if you can get a 6% rate with that credit score and no downpayment, though.  I think that you bring home in the neighborhood of $3700 a month.  Add to that your other payments of about $450 (if I understood that paragraph), and then taxes and insurance and your required payments may go up to $2800 a month.  That leaves about $900 a month for food, clothes, electricity, savings, medicines, phone, cell phone, interenet, TV, water, gas, car insurance,...

IMHO, you are not in a position to buy this big/expensive a house.  

I know that you mentioned that you have a 10 year fiance that you would depend on to help pay for this.  I am not trying to come off as 'old fashioned', but if you are not married, should you be dependent on their income to purchase this?  

All I can say is that one of my friends was dating a woman for many years, but ultimately they went their separate ways.  If your relationship is not to a point that you are ready to marry, then do you want to be dependent on her income to make such a  major purchase?  Can you live on $900 a month if something bad should happen to her income (garnishment from the judgement, for instance) or your relationship?

I dont want to be a doomsayer, but you can not afford this purchase given what you have told us so far.  IF you are carrying a balance on your credit cards, I am not sure that you are even living within your $65,000 income now.  

Why are you looking for a 0 down?  Are you not able to save for a downpayment (then you dont have the ability to add the extra uncertainty that owning involves.... My AC went out last June... it was $1000 to fix it... How could you pay for that in your budget?)?  IF you dont have the room in your budget to save for a down payment, then I am certain that you wont have it when you have only $900 a month discretionary income.

I hope that you reconsider this purchase.


Can you tell us about your retirement planning?  How much are you contributing toward that goal?  How old are you?  

[harry]

[note: clean posted as I was typing--I won't retype, but I'd agree with how this scenario seems unreasonable. I'd love to hear what mortgage brokers are telling the OP]

As to the question why would you finance a house at 100%? In many areas of the country, the recent run-ups in prices have made the traditional 10% downpayment nearly impossible. Try coming up with 10% on a 500,000 house.

That's not to say that 100% financing is a smart move for all people. We did it a while ago, but with some restrictions. We could (and would be happy to) stay in our house for the next 20 years. We both have stable jobs. We got an 80/20 loan, in which 80% of the total is a traditional loan, and 20% a home equity loan. You can also do 100% traditional if you pay PMI, which unlike interest isn't tax deductible (though I've heard that might be changing).

The kicker--we especially chose a home equity loan whose interest rate we could lock. And then we did just that. Usually HELOC rates are variable, which is what's killing people right now--they bought into a house at teaser rates (say 2% for the first year) and bought right up to their limit. Those are the people now in serious jeopardy (plus those who have been using their equity as a bank account).  Our locked interest rate is slightly higher than the variable rate, but we know--just like a traditional mortgage--what we're going to pay, and we made sure it's manageable.

As for your scenario, be aware that with recent credit tightening 660 might not get you 100% (at least at anything decent). Our rating was in the high 700s or low 800s, I can't remember. And if you're only reporting your income of 63k, I'd find it hard to believe that you'll be able to get a 300k 100% financed mortgage.

If you want to post them, I'd be curious what sort of rates and terms a mortgage broker is offering you.

[spork]

Pay off your credit card debt, pay down your auto debt, and save a little.  Don't get in over your head with a huge mortgage.

[abdbiz]

let me get this right, you want to buy a house at 5X income with no down payment?


when did people go crazy?


here is some advice, rent an apt for about $1000 a month and save money for 2 years in Tbills

http://treasurydirect.gov/

you should have about $35,000 after 2 years, and home prices will probably be lower

[tamiam]

I've got to add my voice to the chorus here.

It is NO FUN to be "house poor". What will you do if you are stretched to cover the bills, and your hot water heater breaks?

Unlike many professionals, you are in a business where you won't have major bonuses or much upward mobility in your salary. You could get into a lot of trouble here.

It's just not worth the worry. Rent. Save. Buy when you can put 20% down, and buy what you can afford, NOT what the mortgage calculators tell you you can afford.

[prytania3]

It makes sense to have 100% mortgage if you're in a hot real estate market, where prices are going up and up. That's not what's happening now. Anywhere.

You would be much better off to rent and invest money another way.

[clean]

Just another thought...

Dave Ramsey's "Total Money Makeover"  would suggest that you have a mortgage for no longer than 15 years, and for no more than 25% of your take home pay.

I saw one of  Suze Orman's shows last year.  It was a real estate themed show.  She recommended that you can estimate the most house you can afford by taking your monthly rent payment and multiply by 20. 

Using my estimate of your monthly take home pay (3700) and a 15 year, 6% mortgage, you can afford a mortgage in the 110K to 120K neighborhood under the Dave Ramsey guidelines.

[malachimalachi]

With a monthly income at $5250 you're going to want your total payments at or below 1/3 of that amount if possible. There are definitely programs that allow for greater ratios, but you have to keep in mind how much that is going to cost you. A $300,000 loan is going to run you right around $2,000 (Off the top of my head) and that wouldn't be including taxes and insurance. While you may *have* that 2nd income, if she's not on the loan it wouldn't be something you could use to qualify for. You may  visit
wantedprontofor mortgages, secured loans, remortgages. It’s a revolutionary new way for people to get quotes for anything they want. 
There are no ratio programs that wouldn't require that you document your income, but that is usually going to require money down and is going to be a nominal rate.

[untenured]

Well, OP's inquiry could have been worse.  He could have desired an "interest-only" loan.

Those, of course, are the kiss of death.  Except for the lender of course, who loves them.

Untenured

[iomhaigh]

Can you even qualify for 100% with an income that high?  On a $300,000 house???  Why so expensive??

Full disclosure -- I'm looking at them (and at 97%) mortgages b/c I'm fresh out of school, with excellent credit and making just under the upper threshold that lets me qualify for a 4.75% rate for low-income first time homebuyers.  No debt except student loans.  My mortgage payments + PMI + insurance will be less than current rent in this screwed up area if I buy a house in my range (not the bank's range btw).

But we're not talking about $300,000 houses here -- try less than half of that.

[cackalacker]

Y'all, can I ask a variant on this question?  I'm thinking about buying, in an undervalued market that's still going steadily up. I have a teensy amount of savings. Maybe I could muster a 5% down payment if I tried, but it really might be more like 3%. 

With both me and my partner getting actual jobs, our income is going to more than double, so making mortgage payments won't be too hard. Given that the market's still good, do I buy with 100% financing (or thereabouts) and count on refinancing in a couple of years? Or do I wait through the fall, straighten out post-grad finances, and try to save for a larger down payment?

The latter seems most sensible to me, but people keep talking about my "throwing away money on rent."  Also, given that our income is increasing, should we buy just so that tax-time next year won't feel quite so painful?

My brain hurts so much from this. Thanks for any thoughts...