cancel
Showing results for 
Search instead for 
Did you mean: 
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.

Level 6

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

Once you get into your home, if you don't have enough cash or you don't want to use all your cash up for any remodeling, Home Depot's credit card allows interest free financing for up to 24 months (depending on how much you spend) or even 12 months. You can pay that off before the promotion expired and keep your cash but get your flooring done or buy appliances. Just a thought!
Level 2

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

You're not alone and you shouldn't wait 5 years! Focus on saving for a rainy day and buying a home before prices and rates increase anymore. There are several down payment assistant programs and $0 down mortgage options available now. As a Realtor, I encourage all of my clients to TALK to (not fill out online applications) a few mortgage lenders to learn about the best financial fit for their situation.
Level 2

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

what are these classes and who are they through?.... a little more info would be very helpful.

Highlighted
Level 2

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

"Classes" are available via the NACA program and in the state of Georgia as the GA Dream Home Ownership program. You can also attend a free homebuying seminar hosted by a local Realtor and Mortgage Lender-- make sure both are leading the seminar. "Mortgage programs/options" are available through Mortgage Lenders, and you always want to speak to one to get a more personalized solution. Do not rely on web-based applications because they do not allow for gray areas. If you're in GA, contact me-- [email address removed]. Good luck!
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 live in Massachusetts, where property cost is really high (a shoebox house in the worst part of town is at least $250,000). No bank expects 20% down, let alone 15%. If you can do that, awesome. Banks around here like at least 5% down. I would put 20% of your check into savings each pay period, and after two years I would get a 3 year CD with a high interest rate. Your credit score is fine and as long as you keep doing what you're doing with bill payments. Keep your debt to income ratio low and you will be good. 5 years for a person of your age with a graduate degree sounds like a long time to save for a down payment, but I don't know your circumstances. 

Level 2

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

This is false. You do not always need to pay PMI, especially when your a first time home buyer. There are a lot of programs that only require 5% with no PMI.
Level 2

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

You can buy a home with little down payment, it just means your monthly mortgage payments will be a little higher. Your credit score is within the highest range and will get you a lower rate, but just barely. I got a 4% interest rate on my house and my score was a couple points below 800, in the 790s at the time. Now it's 800 even.
You could get another card and make on time payments on it for the next few years. The number of cards you have doesn't matter, it's the total amount available to you that you are using. The less you are using of it, the better.
Good luck and talk to a good lender. They answer a lot of questions. I'm also 32 and I bought my home at the very end of 2017.
Level 2

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

Let's assume that at 32, this guy already has furniture and cooking utensils wherever he is currently living.
Also, I did not need 10% of the cost of the house for a down payment. It was actually less than 5%. It just makes the monthly payment a little higher but still very manageable.
The debt repayment plan is actually good advice.
_D
Level 7

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

I linked my savings goal (b-day celeb) to my savings on food. Made a budget on Mint and opened an interest bearing checking account that pays me to SAVE 💰🧚🏻‍♀️
_D
Level 7

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

I have 0 debt yet my DTI ratio is $31%🤷‍♀️because rent is considered debt!