The number one problem for would be homeowners is the lack of having enough saved for a down payment. Several years ago 100% financing was being offered in many different ways through most lenders.
They were called 80/20 loans. 100% single loans. Heck some some subprime lenders even offered 105% home purchase mortgages.
Nowadays the best you can get is 97% Conventional, 97.5% FHA, 100% Veterans VA guarantee, and the USDA which allows buyers in certain rural areas to finance with no money down based on the location of the house and household income limits.
What about the high income low savings families that want to get a loan that requires more money down?
Answer: Borrow the down payment with an unsecured personal loan.
Yes if you have a 640 credit score you can borrow up to $35,000 if you plan at least four months ahead. P2P and other personal lenders will let you borrow cash and pay it back over three to five year periods.
You’ll want to calculate your debt ratio and make sure you can really afford to make the new payments payments combined with your existing ones.
Should you borrow money for a down payment on a house?
If you want to own a home but cannot save money for a down payment this may be a good solution for you. If you can save $500 to $1000 a month then waiting until you have enough saved is your best answer.
I have 10% to put down should I borrow 10% so I can put a full 20% down and avoid mortgage insurance?
Maybe. You’ll need to run some numbers to compare the cost (interest and closing costs) of borrowing vs the cost of paying the PMI.
If there is any interest in running some sample numbers leave a comment or contact us and we’ll add a comparison table to this article.
Start by seeing how much you’ll qualify for and what the payments will be.
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