Putting A Down Payment On Your Home
How much of a down payment will I need to buy a home?
Nowadays you can put no money down when buying a home. It's based upon what you can qualify for, so if you make a lot of money and you want to buy an expensive home, but you don't want to put any money down, then that particular bank is going to look at your income and how strong you are from a liquidity standpoint with reserves. But yes, overall 5%, 1%, everything's out there now.
What can I do if I have little or no money for a down payment?
You can still get a paper pricing if you qualify for that loan. But there is a lot of lending institutions you can go to now for a hundred percent financing. Alot of them are even going up to a million and a half dollar loan. So yes, overall you can definetely get a hundred percent financing.
What are the risks of putting "zero down"?
There are indeed risks of going zero down. Let's take the example of when you buy the house for 5 dollars and you put no money down. The problem is, what if the market starts to turn around? And your house which you bought at 5 dollars isn't appreciating, but it's going the opposite way. So now maybe your house, a year from now, is only worth 49 dollars, compared to when you bought it at 5. And from a banks point of view they're going to be in trouble with you, because you're going to walk away from that mortgage if that property keeps going the opposite way. So most lending institutions want you to put a little more money down because of that risk factor.
