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how to buy a house?
It seems impossible to save enough money for a mortgage downpayment. how do most people do it and buy a house? Are there any shortcuts?
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Hi, I know how hard it is to save. I'm sure you have the best intentions, but then something comes up, and poof... the money is gone. Try getting together at least $500 and putting it into a CD account then make weekly/bi-weekly deposits. Sometimes its easier if we have someone we can be accountable to. Try asking a sibling, close friend you can trust, or better yet, one of your parents to collect the money from you regularly and make the deposits. If all else fails and you have good credit, try going for a no money down loan. Hope this helps.
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My other half and I slaved away for a LONG time to afford our downpayment. It was around £8,000 altogether in the end and the mortgage is quite a good deal but if we hadn't saved for so long we never could have managed.
There aren't really shortcuts if you want to do it properly. There are lots of different mortgage options and I would suggest you speak to a Financial Adviser for further information but if you want to be sure you don't get caught out, the only thing you can do is work out what sort of money would be a reasonable sum and then work overtime as much as possible until you have enough money to do it.
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First:
Be careful with the links from that search. Some of them may spam you.
A mortgage without a down payment is definitely possible, but not necessarily easy. Unless you're already a millionaire, life in general is a lot harder and more expensive than it used to be.
A car used to cost a month or two of the average worker's wages; now, it's more like a year.
It used to be that a house cost perhaps a couple of years of salary; now, you'd be lucky to find one for five times that cost, in some parts of the country.
The good things in life, the things that people used to be able to almost take for granted, are now out of reach for most of the working and middle class.
If you can't find a way to save up the thousands of dollars you need to make a down payment, there are other options.
1. Get married. It's considered crass to simply ask for money in many cultures, but if you pass the word around that you're planning to buy a house, people will probably help out.
2. Go to your parents. They may be able to help.
3. Wait for wealthy relatives to die.
4. Rob a bank. Just kidding!
5. Normally when I have useful advice I put it FIRST, not last, but I'm a bit groggy this morning. There are programs which will allow you to buy a house without a down payment, or with a smaller one than normal. Effectively, you borrow the down payment from the bank at the same time as the mortgage.
You will, of course, pay for the privilege; banks require extra insurance on your loan, and that means a higher monthly bill.
I should also note that sellers sometimes prefer to sell to buyers who can afford the down payment themselves. And in competitive markets, buyers sometimes get an advantage over each other by putting down very large down payments indeed. I once lost out on a house because another buyer offered the first half of the total price IN CASH - a "down payment" of 60-70 thousand dollars!
Some states and cities have special programs to help low-income people buy their first house. The drawback is that you may be required to stay in that house for a number of years before you can sell.
Even if you don't think that you're poor enough to qualify, check it out. You might be surprised.
You're best off talking to a professional buying agent in your area. They'll know what programs are available to you. They work in real estate offices, of course, and they WILL take a cut of the sale. So be sure you get a good one.
A few home-buying tips:
First, it's almost ALWAYS a very smart move to buy a home. People often fail to realize that when you rent, the money goes to your landlord and is gone forever; but when you BUY, the money you pay goes into your equity.
When you leave a place that you rented, the only thing you'll get back is your security deposit, assuming that your landlord doesn't screw you. When you sell a house that you owned, you'll probably make a profit.
There are, of course, some circumstances in which this isn't true. If you buy a house when the market is high, and sell it when the market is low, you could actually take a substantial hit - potentially, many thousands of dollars. Some people end up trapped in their houses for years by an unfortunate market situation.
But that's not all that common. Still, it would be VERY smart to learn as much as you can about the housing market in your area. This is probably the biggest purchase you'll ever make; make it a smart one.
Another adage is to buy in the best neighborhood that you possibly can, even if you have to buy a house that will need a lot of work. Because you can fix up a house, but you can't fix a neighborhood. And the work you put in on the house will be MUCH more profitable if the house is in an attractive location.
Get a great home inspector, listen to him or her, and ask LOTS of questions. Ask about the roof, the furnace, the electrical system, the plumbing, and anything else that you can think of. You're paying for their time and expertise; make sure you get what you pay for.
And if you have children, or think you might have children living with you some day in that house, have the house tested for lead. I can't emphasize this enough. It's vital.
Lastly, if you have credit-card debt, do your best to pay it off. And kill the cards once you've bought the house. You'd be amazed at how many people go bankrupt (or used to, before Congress effectively eliminated bankruptcy for the poor) because they couldn't handle a monthly mortgage payment on top of 25-30% interest rates on credit cards.
It's a real jungle out there, and (to mix metaphors) the sharks are swarming. Please protect yourself.
Good luck!
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You need to get a loan from the bank.
Rae <3
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