October 26, 2006,
C.M. asks from Chicago, IL on October 24, 2006
D.L. answers from Chicago on October 25, 2006
Have you looked into getting a FHA loan? When my ex and I bought I first house using this type of loan, we only had to put down $1000. Google FHA, on their website there is all kinds of info about the program and information they can mail you.
Good luck :)
N.L. answers from Chicago on October 25, 2006
My husband should be able to help you. His name is Malik L. and his number is ###-###-####. Tell him I referred you. Good luck.
E.R. answers from Chicago on October 26, 2006
You have to look into the IHDA (Illinois Housing Development Authority) they have the BEST Interest Rates for first time home buyers. They are in the low 6%, has very low income requirements and reserves. The down payment is also very low. We are working with a developer that is working together with the city of Chicago on getting people with low income a down payment. Please feel free to call me at ###-###-#### if you want more information on this I can connect you with one of our Loan Consultants.
Good Luck being a first time homebuyer is so much fun!!!!!!!!!
R.K. answers from Chicago on October 25, 2006
The City of Chicago has a couple of programs available for downpayment or closing cost assistance. Check their website. Also, check with your place of employment as some are now helping employees become homeowners and check with your church (if you belong to one). Some are also helping their parishoners become homeowners.
Word of advice - if you do go the route of create financing, be sure to find a reputable broker, lender, attorney and inspector. Try to avoid PMI, b/c really all it does is insure that your lender will get paid in the event that you go into foreclosure. It's money that you pay to insure them. Doesn't help you at all.
We bought our place with decent (not great) credit in an 80/20 loan where we have a 1st and a 2nd mortgage, but we only had to come up with the earnest money ($1K) and the closing costs (which can be borrowed from a 401K with no penalty and you have to pay yourself back afterwards). We avoided PMI (by taking out the 2nd loan) and our payments are reasonable ($1700/month). The only sticky situation is that there is a pre-payment penalty on the 2nd if we sell before 3 years are up, which we don't plan to do. We got really good interest rates and reputable lenders (no subprime or potentially predatory lenders).
If you want the name of a great broker who can help you navigate some of the options that are out there, I can give you the name of my friend who is terrific.
K. answers from Chicago on October 24, 2006
There are a lot of "creative financing" options available these days - you may be able to get by putting only 5% down. What you'd do is take out a mortgage for 80%, and then a second mortgage for the remaining 15%. Alternatively, you can get PMI (mortgage insurance) - it's an extra payment but it goes away when either you've paid to own 20% of the home or if your home appreciates and you only owe 80% of its value left, that will also get rid of your PMI.
We were able to come up with half our down payment (10%) and my parents "gifted" the other 10% to us. At some point we will "gift" it back to them, but to get the mortgage they have to sign an affidavit saying that they don't have any expectation that we will return the money - ie it's a gift and not a loan.
Whatever you end up doing, make sure you can afford your payment. It's better to start out small and have some money to spare than to stretch and get into trouble because you become injured and unable to work or something.