Liz asked:
We live in NJ and are looking to buy our first place, but we aren’t sure if we’ll have enough money by the time the process is over for the down payment, the closing costs, the safety net AND new hardwood floors, but we feel that’s necessary to move in. We’re planning to get a townhouse that’s well within our budget in the long run and in terms of monthly payments, we just don’t have the cash up front. Can you build an extra amount of cash into a mortgage, and get it upfront for such upgrades? Thanks!
You could be of service by answering the question!
HAL
We live in NJ and are looking to buy our first place, but we aren’t sure if we’ll have enough money by the time the process is over for the down payment, the closing costs, the safety net AND new hardwood floors, but we feel that’s necessary to move in. We’re planning to get a townhouse that’s well within our budget in the long run and in terms of monthly payments, we just don’t have the cash up front. Can you build an extra amount of cash into a mortgage, and get it upfront for such upgrades? Thanks!
You could be of service by answering the question!
HAL
MURRAY
Have the seller do it and add it to the price.
Comment by astralpen — October 28, 2009 @ 4:27 pm
RICARDO
Generally speaking, no. Mortgage companies will require you to have a down payment in order to prove that you have some equity in the house. In an FHA loan you need 3.5% down. In a conventional loan with PMI you will need atleast 5% down. Unfortunately, a mortgage company will not approve you for a loan unless you follow this criteria.
Here’s some tricks to getting around YOU paying the down payment out of your pocket.
1. You may have the funds for the down payment gifted to you from a family or a friend. Depending on the bank they will allow you to gift a percentage.
2. Ask your loan officer if they can look into grants which you can apply for which are intended for first-time homebuyers. Sometimes if you receive a grant you can have some of your down payment paid.
Ask your loan officer and be truthful with them. More than anything they want you to close because they make money off of your mortgage. They will bend over backwards trying to get you money to fund your house.
Comment by mortgageguy5 — October 29, 2009 @ 5:15 pm
QUINCY
Theoretically, yes. But they won’t likely give it to you up front — but will withold it & pay it to the floor installer. In practice in the present market it is unlikely.
Comment by MLaw — November 1, 2009 @ 2:21 pm
SAM
You can no longer finance the down payment, or improvements.
If you buy a house for let’s say 100k and you go FHA you would need 3.5 % of your OWN money for the down payment. The closing costs would also have to come out of your pocket. You would only get a loan for the house, not hardwood floors.
Back in 2005, people were doing these types of silly loans..they were 80/20 loans. These are also people who really had no business buying a house. Why? Because they couldn’t even save up 3.5%? LOL
If you go conventional, you would need up to 20% down to avoid PMI.
You also have to have the cash for your first years insurance, home inspection and taxes.
The short answer is no, you cannot roll all those other things into the loan. Not these days!
Comment by ☼AstrologerJuliAnne☼ — November 2, 2009 @ 10:10 pm