Anonymous
Anonymous asked in Business & FinanceRenting & Real Estate · 1 month ago

Steps to becoming a homeowner with zero down payment?

I want to purchase my first home between the price range $100k-390K. I just graduated college and I have student loans I have to pay back which is 17K. I make big monthly payment to finish faster. My credit is really good. But can I get a home? what are the steps? Is getting a realtor free?

Update:

BWT I'm in my career finically stable and can afford a home just want to know the process FYI

Update 2:

been working for years

17 Answers

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  • 1 month ago
    Favourite answer

    To qualify for a loan - you need a couple things:

    - good credit (you get this by paying your debts on time)

    - established income (this is a bit trickier than just "been working for years")

    A lender wants to know that the current income you have, should continue into the future.  You do that by showing tax returns - that show a couple years of income, in the same field that you're in now.  It doesn't have to be working for the same company, but it needs to be in the same field.  So someone who is an engineer at Chevy now, but was an engineer for five years at Ford - has continuation of work history.

    If you put yourself through college by always working - as a waiter or maid or mechanic - but now graduated and you're a lawyer - it's not continuation of work.  You'll need a couple tax returns as a lawyer.

    The seller pays the Realtor who has the sign in the yard (who also REPRESENTS the seller - so don't call on the sign)  The selling Realtor will share the commission with whichever Realtor brings the buyer (so find a Realtor to REPRESENT YOUR INTERESTS, because it does not increase the amount of commissions paid).

    First step - find a Realtor that is a  buyer's agent.  Tell them what your goals are, what your limitations are - be honest.  They will know several lenders, and be able to direct you to one that has a product that would match your needs (IF a product like that exists in your market).

    If you walk into a random lender's office - they will sell you what THEY have to offer, and they might not have what you need.

    Source(s): I was a Realtor for 20 years. Not now - so I do not know what lender programs are currently available.
  • 1 month ago

    Getting a realtor is free.  Using a realtor is not.  The realtor gets a percentage of the price when the home sells.

  • 1 month ago

    The days of Zero down payments are gone. You need at least a partial down payment--which is usually around 20-30% of the purchase price--to qualify for a mortgage. And you will need additional cash for closing costs and inspections. 

    The steps are first to go to a reputable financial lender such as a bank or credit union and apply. They will let you know what the requirements are for getting a home loan and how much you can spend. Once you qualify, you can use a realtor to help you find a home that fits your budget. No--you don't pay up front for a realtor. The realtor makes money when you buy the home. 

    Other than that basic info, you aren't going to get detailed information because getting qualified for a mortgage depends on a lot of factors--not just that you're working, but what your debt-to-income ratio is, your credit score, the stability and length of your employment and your geographical area. And there are a lot of other factors as well--the type of home, price of the home, location, condition--you'll find out the whole process as you go along. 

    That's where you start--with a financial institution. 

  • n2mama
    Lv 7
    1 month ago

    First step for you would be to meet with a mortgage broker and see what you qualify for. The answer may very well be nothing, and here’s why. Zero down payment loans  are limited (as someone else pointed out) to VA and USDA loans, which have a lot of restrictions and limitations that apply to them. Having good credit is great, but far from the only needed factor to get a loan. If you just graduated from college you probably don’t have the work history lenders look for (generally 2 years in the same industry and at a similar rate of pay). Speaking of pay, you don’t mention your income at all, and that’s a critical factor too. Rule of thumb is that a mortgage can be about 3x your annual income, so if you want to buy a house for 100k you need to make about 34k a year minimum. For a 390k house you need to be pulling down 130k/year. There also your debt to income ratio which impacts what you can qualify for.

    So the first step is to talk to a lender or broker and see what they tell you. Once you know what, if anything, you qualify for, then you can see about finding a realtor and actually looking at houses. Homeownership is a great goal to have, but it sounds to me like you are still a few years away from making it happen.

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  • 1 month ago

    NO more zero-down loans - those were abolished after the 2008 fiasco in real estate. You need a down payment, plus mortgage application fees, closing costs, fix-up & moving expenses, home owners insurance, plus reserves toward future mortgage payments. You need 3 years track record on the job, credit history, etc. Pay off your student loans & save up before you start looking at houses. 

    BTW, lots of college grads would be silly to get a house right away as they tend to need to be rather mobile to take up job opportunities. Tying yourself down to a house at this point could be harmful to your financial future. 

  • 1 month ago

    I would advise renting and accumulating enough money for at least 10%down and preferably 20%. 

  • ?
    Lv 7
    1 month ago

    If you just graduated, that means you probably haven't had your job for a year yet.  No mortgage company will talk to you yet.  You may qualify for one of the no or low down payment first time home buyer programs.  Use Google to find one in your area.  SONYMA has a down payment assistance program available now.  Check your credit score and make sure it's over 700 before you apply.  Realtors usually don't charge the buyer unless you hire one as a buyer's agent. They make their money by collecting a commission on the houses they sell.

  • 1 month ago

    The only no down home loans are USDA or VA.  Doesn't sound like you'd qualify for VA.  Save money.

  • 1 month ago

    1 - save up enough for a deposit. You don't get a mortgage unless you have a deposit too. 

  • Anonymous
    1 month ago

    You cannot buy a home with zero down payment.

    Buyers do not pay sales commission to realtor.

    Buyer has to pay 2-5% of the price of the house in closing costs.   That's $2000-$20,000 depending on the cost of the home you decide on.   You'll also have to pay "prepaids" which are things like homeowner's insurance, reimbursing the seller for your prorated portion of the property tax they paid in advance, and loan interest from the day of closing to the date of your first payment.

    You're going to need at least a 5% down payment for a conventional loan.   You can get an FHA loan for 3.5% but it will be a higher interest rate.     If you don't want to pay for expensive mortgage insurance, you'll need 20% down.    Based on the price range you gave, you'll need $3500 to $78,000 for down payment.

    And you'll also need an emergency savings account.   How will you make the payments if you lose your job or break your leg and can't work?   How will you pay for repairs/maintenance?

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