First time home buyers - realistic? — The Bump
Military Families

First time home buyers - realistic?

DH is hopefully getting a recruiter slot and we should be moving within the next 14 months.  We are desperate to buy a house and didn't here because of the creatures and crime (San Antonio).  Also, we couldn't find one we loved.  Well now that we'll be at our next duty station for at least 4 years, we want to stop paying over $1,000/month in rent and buy a house we get to love.  We plan on using the VA loan and I have pretty good credit but is it realistic for us to not plan on putting anything down? I mean, we would love to not put a dime down and finance everything.

TIA

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Re: First time home buyers - realistic?

  • We have purchased 2 homes this way so far and have done just fine both times :)
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  • DH and I haven't used the VA loan yet, but friends of ours just bought a house and said you dont need to put anything down if you use the VA loan. Not sure if there are exceptions or not, though.
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  • We just bought our first house last year and used the VA. We didn't put a dime down and we're doing great!
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  • When we used the VA loan, we didn't put a dime down. But we did have to bring money for closing costs.

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    CJ 05/29/2013

  • Thanks ladies =)  Are you guys close to your BAH or pocketing some?
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  • We didn't put anything down, but keep in mind depending on your state/county you may have to bring money to the table for taxes, home owners insurance, etc. Our BAH covers our house payment to include escrow, but then we pay all utilities out of pocket and every year something ends up needing to be updated on the house.
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  • We are closing in 2 weeks with a VA loan, but we put 10% down.  We are also paying some closing costs, costs of the inspection and appraisal, and cost of the closing attorney. 

    BAH covers mortgage payment + insurance + some utilities.  We have a healthy emergency fund for needed repairs and upfront work that needs to be done to the house.

    ETA:  We also paid 1% upfront for 1 point.

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  • I'd also recommend looking into USAA's movers advantage program. They set you up with a realtor and depending on the price of your home, you can get a check from USAA. We got $750 from them just for buying a house. :)

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    CJ 05/29/2013

  • Like the other ladies said, you will have to have some money on hand for closing costs, inspections and such.  Depending on you lending company, they may allow you to roll some of your closing costs into your loan.  The amount you have to bring to the closing table will depend on taxes, fees and such.  You can also try to get the seller to pay some of those costs.  Unless they are desparate, they won't pay it all. 
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  • NSLNSL member
    You also need to think about housing costs beyond your monthly mortgage when you own.  Repairs (routine and unexpected) and maintenance are really expensive, and if you don't have money for a downpayment I have to worry that you don't have cash in the bank for these either.  
  • I sent you a PM. 
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  • We used VA for our home loan and didn't put anything down.  
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  • I am echoing everyone else and saying that we just bought our first home also in Sept. and didn't put a dime down either because of our VA loan. We thought about putting some money down but we figured we could do more with 10,000 now than an extra $50 a month.
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  • We bought our house a few years ago with a VA loan and no down payment. We got the sellers to pay for closing so it *almost* felt like we got the house for nothing. Until the first mortgage payment was due, obviously. As long as you factor in the mortgage payments, utilities and possible repair/maintenance issues, you'll be fine.

    I will also echo a PP and recommend looking into the USAA Movers Advantage program. We got around $1200 or $1300 just for going through them and using their recommended realtor.   

  • I work in the mortgage field, I was on the originating side years ago, now I'm on the foreclosure end.  You may be able to find a mortgage company willing to give you a loan with zero down but I think you'll be hard pressed.  Because of the foreclosure crisis, mortgage underwriters are putting borrowers through the ringer to prove that they can not only pay the mortgage but their other monthly obligations and have a little wiggle room.  If you can't scrape together just 5% of the total sales price you're not looking very favorable.

    My advice would be to wait until you can get a down payment together.  I also tell people to look into other types of loans (you won't qualify for conventional without a 10% down payment but FHA may be another option)...just because you have the option of a VA loan doesn't mean it's the best fit for you at the present time.  A VA insured loan is a one time deal and unless you plan on making this home your forever home I'd think twice about using it.

    Finally, before you buy consider what you're going to do with this home after the four years are up.  Will your husband be making a career out of the military?  If so, will you want to rent the house out after you move away?  If not and the market doesn't improve enough to garner a quick sell will you be able to carry both a mortgage and a rent payment somewhere else?

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  • imageDowagerCountessofNJ:

    I work in the mortgage field, I was on the originating side years ago, now I'm on the foreclosure end.  You may be able to find a mortgage company willing to give you a loan with zero down but I think you'll be hard pressed.  Because of the foreclosure crisis, mortgage underwriters are putting borrowers through the ringer to prove that they can not only pay the mortgage but their other monthly obligations and have a little wiggle room.  If you can't scrape together just 5% of the total sales price you're not looking very favorable.

    My advice would be to wait until you can get a down payment together.  I also tell people to look into other types of loans (you won't qualify for conventional without a 10% down payment but FHA may be another option)...just because you have the option of a VA loan doesn't mean it's the best fit for you at the present time.  A VA insured loan is a one time deal and unless you plan on making this home your forever home I'd think twice about using it.

    Finally, before you buy consider what you're going to do with this home after the four years are up.  Will your husband be making a career out of the military?  If so, will you want to rent the house out after you move away?  If not and the market doesn't improve enough to garner a quick sell will you be able to carry both a mortgage and a rent payment somewhere else?

    I'm sorry, but much of this is not true.  If we sell our home which was purchased with a VA loan, we can take out another VA loan on a new home.

    If a mortgage lender tried to tell me that I HAD to have a down payment for a VA loan, I would find a new lender. 

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  • we have owned 2 homes with VA loans and havent put any money down. The third home was a traditional with 20% down (that was because I bought it on my own before my hubby). We are closing in a month on another house and decided NOT to go with the USAA program because 1) we didnt like their selection of realtors and 2) we got MUCH better incentive with a local mortgage company and a much better rate. 3.75 after everything is all said and done with no points. Best bet is to shop around and not to just go with your bank because their can be better choices out there

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  • I thought there are fees associate if you use your VA loan more than once? They told us to use mine next time b/c we used DH's the first time. If we use his again they'll charge us a certain percentage of the purchase price.

    I don't think the Countess was giving wrong information, she was giving other options. Some lenders like to see money put down, it is very true they could deny you or not want to work with a VA loan and no money down. You do always have the option of another vendor. 

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    CJ 05/29/2013

  • imageBacon+lettuce+tomato:

    I thought there are fees associate if you use your VA loan more than once? They told us to use mine next time b/c we used DH's the first time. If we use his again they'll charge us a certain percentage of the purchase price.

    I don't think the Countess was giving wrong information, she was giving other options. Some lenders like to see money put down, it is very true they could deny you or not want to work with a VA loan and no money down. You do always have the option of another vendor. 

    Yes, there is a funding fee every time you get a VA loan.  It increases by about 1% after the first use unless you can put money down for each subsequent loan.

    No, definitely not wrong information but I think it's untrue that it's nearly impossible to get a 0% down loan.  NFCU offers them for non-VA loans which is why I said I'd just go to another lender should someone tell me that there's no way I can get a loan with nothing down.  I'm coming from the perspective of a couple with excellent credit and no debt though.

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  • imageflip_flops:
    imageBacon+lettuce+tomato:

    I thought there are fees associate if you use your VA loan more than once? They told us to use mine next time b/c we used DH's the first time. If we use his again they'll charge us a certain percentage of the purchase price.

    I don't think the Countess was giving wrong information, she was giving other options. Some lenders like to see money put down, it is very true they could deny you or not want to work with a VA loan and no money down. You do always have the option of another vendor. 

    Yes, there is a funding fee every time you get a VA loan.  It increases by about 1% after the first use unless you can put money down for each subsequent loan.

    No, definitely not wrong information but I think it's untrue that it's nearly impossible to get a 0% down loan.  NFCU offers them for non-VA loans which is why I said I'd just go to another lender should someone tell me that there's no way I can get a loan with nothing down.  I'm coming from the perspective of a couple with excellent credit and no debt though.

     

    I think she meant more conventional loans, it is harder to  get a conventional without a down payment. Especially if you can't finance through a military bank. Kwim? 

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    CJ 05/29/2013

  • We paid absolutely nothing up front when we bought. I think it depends on the person you buy from. My friend was the broker and she did a lot. She got us all brand new appliances and got everything in the home repaired and got us new fans...

     

    It is possible. 

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  • imageKorieAngela:

    We paid absolutely nothing up front when we bought. I think it depends on the person you buy from. My friend was the broker and she did a lot. She got us all brand new appliances and got everything in the home repaired and got us new fans...

     

    It is possible. 

    This depends on where you are.  In many areas, it is almost unheard of.  Here, it is nearly impossible.  Talk to a Realtor near you to see what the norm is for the area you are buying in. 

    On average, here, a seller will not pay more than 50% of clossing costs.  They will normally fix things that need to be fixed for inspection, but not much more.  Rarely will they replace apliances unless they are extremely out dated.

    Like I said, check with a Realtor in your area. They will be able to give you the best advice. 

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  • I think buying is a great option! We bought a house in El Paso Texas in June 2009. We are still here! We used the VA loan through USAA and we didnt have to put any money down. We called our bank (USAA) and had our credit ran and was approved for our loan. We started looking while we were still stationed in Germany and when we PCS'd to Texas we were ready to see the houses we choose online. We searched for a few days and finally found out home. It only took 3 weeks for us to close on our house. Once we got all the papers signed we had to pay closing cost which was about 4k and that was out of our own pocket. The VA does not cover this expense. You could however ask the owners of the house to pay for the closing on the house. Make sure you find a good realtor who deals with VA loans and are knowledgeable in them. Best of luck!! being a homeowner is a great feeling! HAPPY SHOPPING!
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