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Level 2

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Look into NACA! I'm going through them!
Level 2

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Listen, all of those other advice are nice. But there is an easier solution. Join the military, serve in the best military in the world. After you get out, the VA home loan, no money down for a house.
Level 2

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

I have no **bleep**ing money let me in
Level 7

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Lol curtains are the first order of business and were mentioned twice? We have bought two homes and they've never been in discussion for either!
Level 2

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Here are the elements to get you the best interest rate: a) FICO 740 or above, b) Debt to Income (DTI) less than 50%, c) no derogatory items on your credit report, d) being a full-time employee in the same line of work with no gaps for at least 2 years with stable or increasing annual income.

 

There are loan products that allow as little as 3% down for first time home buyers. As mentioned before, mortgage insurance (MI or PMI) is required (either borrower paid or lender paid) for loan to values (LTV) greater than 80%, typically. If PMI is lender paid, it results in a slightly higher interest rate but you do not see an actually monthly line item for that cost; it also means you pay for it the entire term of the loan rather than being able to cancel PMI once your LTV reaches 78% of the initial purchase price.

 

Keep in mind that on top of a down payment you will have other closing costs and fees to cover, such as: appraisal, home inspections, title, escrow reserves, pre-pays for home insurance and interest. If the home you are looking at has mandatory HOA dues, those will need to be factored in to your overall monthly payment too.

 

Don't think you are looking for the home you will retire in as your first home purchase. You are looking for a starter home to stay in less than 10 years, typically.  Good luck!

Level 6

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

This right here, this is the best answer to the posters question.
The others assume they have debt, but they said they have none.

Even 30k might be a bit much depending on the cost of the house they’re looking for, but you certainly gave the best answer.
Level 6

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

First, look to see if your state has any Programs that help with down payment assistance. There may be First Time Homebuyer's assistance for example. In Nevada, they have several programs where the State pays closing costs, they pay the down payment and it's not limited to first time buyers. The max income to quality for Nevada's program is $95k with a minimum credit score of 640. These prorams may have a higher interest rate but they give you free money to get into a home. Regarding down payments, if you put less than 20% down you will be charged PMI or mortgage insurance. This will be tacked onto your mortgage and will increase your monthly payments.

Next, ask yourself how much you're willing to pay in mortgage payments every month. Not only that, but factor in utilities and possibly HOA fees. Water, Energy, Gas, Trash/Recycling, Internet should all be factored into your monthly payments. Keep in mind that depending where you live, your Energy bill mY have huge spikes from heavy use of AC or Heating. Also, once you buy there is a daunting realization that you have to be able to make this mortgage payment FOREVER (or unless you sell the property). So you have to be comfortable with the monthly mortgage payment.

Next, Loan Type. Buyers accept offers in the following order: Cash, Conventional, FHA, VA . I recommend you go with a Conventional Loan. But definitely ask your lender about the differences.
Also factor in how much remodeling you need to do. That will cost you!

Oh also, you need to SEASON your money. That means, your money needs to sit in your accounts UNTOUCHED for several months while you look for a property. The lender will ask you for bank statements to see where your money is coming from and where it goes, while they determine if you are able to maintain a mortgage. That means no opening of any new credit accounts and no big purchases.

CLOSING COSTS. This one surprised me. I was so focused on the down payment, I didn't realize you needed just as much in closing costs! Ok, you don't need a 20% payment in closing costs, but this is the point where everyone gets paid. So be prepared to set aside a couple THOUSAND dollars for closing costs. You can negotiate who covers these costs (seller, buyer) or you can split the costs. This is also used in the negotiating to buy, because sellers are prone to accept offers where Buyers pay closing costs.

Well you're debt free so that is fantastic!!! The important thing to know is that you may be offered a big loan, but you must think of a monthly payment you are comfortable paying Evey month, even if. You lose your job.

Since you are debt free, you should have no problem Saving for a 20% downpayment. You could probably get into a home sooner than 5yrs.
Level 6

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Right?!? My home came with solid, thick, wooden blinds! Didn't need to touch them!
Level 7

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Step 2 is flawed logic. Make excess principal payments on your highest interest rate loans first. This will result in the fastest paydown of outstanding debt as it will reduce interest costs.

Level 7

I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

Exactly! Great, you paid off a small lump, but the big one is getting hammered with higher interest. Don't ignore higher interest rates.