First time home buyer, Pre-qualified by Chase for 195,000... downpayment needed?

[Anonymous]

Hi all,

Have very much enjoyed reading the forums!

Curious to get your opinions...

I am a first time home buyer with a steady salaried job (I'm a psychologist at a public university). I make 64,000 per year. Have been with my current job since August 2010. My credit scores are TU 683 and EQFax 697. I have had 9 years of credit card history with only 1 or 2 late payments 4 years ago. No defaluts. My credit card minimum payments are around $650 per month and I have a student loan payment of 500 per month. No car payment (it's paid off). No other expenses.

Chase pulled my credit report and i was prequalified for 195,000 loan at 3.375% APR.

The only problem is I won't have much money for a down payment (maybe would have 2000-3000 dollars saved by end of summer but that would be pushing it.

What are my options with no down payment?

I've heard of 80/20 loans (piggyback loans). I've also heard of taking out PMI.

Can I get a loan with no down payment?

Thanks!

Brad

[Anonymous]

So, talked to the person at Chase who gave me pre-qualification for mortgage. They are asking that I be able to put down 3.5% of the purchase price for a down payment in order to secure the loan from them. He told me that the down payment could be payed at closing (i'm guessing in combination with the closing costs, although I may be able to get a seller to pay the closing costs for me).

3.375% interest rate on $195,000 loan with only 3.5% down sounds like a great deal so I think I'm gonig to pursue this even though I've heard some mixed things about Chase in a couple posts on this forum.

If anyone has any specific thoughts or any other ideas I would be open to hearing them. (maybe another lender Wells Fargo, Citibank, etc would be a better option?)

[JonRun]

I had a mortgage that started out with some obscure company and Chase bought it right before closing. They were actually pretty good to deal with. I got into a financial jam a few times and they were always very helpful and kept me from getting behind on the notes. I don't have any complaints about them.

[Sunshine85]

As far as I know, the only no down payment loans available are USDA rural loans and VA loans. It sounds like the lender prequalified you for an FHA loan, which requires a minimum of 3.5% down. Mortgage insurance (MI) will be required with an FHA loan. USDA loans also have mortgage insurance, but at a much lower monthly payment than FHA MI.

[Anonymous]

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@Sunshine85 wrote:
As far as I know, the only no down payment loans available are USDA rural loans and VA loans. It sounds like the lender prequalified you for an FHA loan, which requires a minimum of 3.5% down. Mortgage insurance (MI) will be required with an FHA loan. USDA loans also have mortgage insurance, but at a much lower monthly payment than FHA MI.

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+1, I don't know of any other 0-down or low-down programs. If coming up with a 3.5% down payment (plus other cash due at closing) is a serious challenge, then I think conventional wisdom is to wait a bit until you can.

You could also check into some down payment assistance programs, or see if friends or family can help. Or, as a last resort, a 401k loan is an option.

[sewmuchdebt]

since you are a first time homebuyer i would definitely check into down payment assistance programs in your area. sometimes you can qualify for more than one! also don't forget you will have to pay closing costs as well so if you have a good agent, that can be negotiated to have all or some of it paid by seller. good luck