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Any tips on buying a house
I’m looking for 3 bed 2 bath. Something around 200,000. I’m young I have about 10,000 saved. I want to apply for an fha loan. Any tips? Advice? How much more money do you think I will need? With the loan?
22-25, F
21 replies
May 22, 2020
swirlie · 31-35, F Best Answer
To qualify for a mortgage WITHOUT the mortgage being life-insured and payable to the bank in the event of your untimely death, you must have a minimum of 25% down as a deposit. That is Law.

Therefore, for a $200k house in the USA, you would have to save $50,000
( 25% of $200k = $50k.)

But, if you have less than a 25% deposit on any household mortgage, the bank requires that you purchase life insurance on that mortgage which names the bank as the recipient of the insurance payout if you die. That too is Law.

The problem is, life insurance for a housing mortgage is significantly more in annual premiums than is a basic life insurance policy that you might have for yourself. And the less you have saved for a deposit relative to the purchase price of the house, the greater the life insurance policy must be and the higher the monthly premiums will be which are generally blended into each monthly mortgage payment.

As well, you can purchase 'loss of income' insurance from the bank at the same time, which means if you get laid-off from your job, the 'loss of income' insurance will pay your monthly mortgage payments for you each month. Sometimes, that policy will actually pay off your entire mortgage for you on the spot, but that loss of income insurance is VERY pricy to buy each month.

The very LEAST amount you can have as a deposit on a housing mortgage by Law, is 5% down. So therefore, on a $200,000 house you would need to save 5% of $200k = $10,000

You've already stated that you have $10k saved already! But that only gets you in the door of the bank, otherwise they cannot help you. In other words, don't give up your apartment before you've talked to the bank!

Case in point, back in 2008, banks in the USA were offering zero-down housing mortgages in an attempt to get people to come in and borrow very large sums of money so that the banks could make a ton of money off those unsuspecting home buyers from mortgage interest each month.

To make a long story short, that American-led banking practice caused the Great Recession to occur globally which began in 2009 as a result of millions of people defaulting on their mortgage payments. This occurred when those same banks substantially increased the interest rates when everyone's mortgage came up for renewal and nobody could afford it.

Millions of Americans simply dropped off the keys to the house on the bank Manager's desk and walked out. The banks now owned millions of vacant houses across America.

Zero-down housing mortgages then became illegal in the USA. Zero-down mortgages have always been illegal in most countries around the world.
Prior to 2008, the only country in the world that never offer mortgages with less than 25% down, was Canada. As a result, Canada was the only country in the world that was not affected by that American-led global financial meltdown of 2009 of which the United States banking industry has not yet fully recovered from even at this late date of 2020.

Ever since then, a substantial deposit has been required for all mortgages in the United States, including commercial mortgages, generally in the neighborhood of 20% down but as low as 5% down if you buy the bank-sponsored life insurance plan and loss of income insurance plan... which ain't cheap!

It is my personal recommendation that I offer from personal experience, that you NEVER buy a house with less than 25% down as a deposit. And if that means that you can only afford a $40,000 house with a $10,000 deposit, then so be it.

If you cannot raise at least 25% of the purchase price of your intended house, you should continue renting until you can afford 25% of the purchase price... period, plain and simple.

And avoid purchasing a condo. DO NOT buy a condo under any circumstances.

DO NOT purchase a semi-detached dwelling (townhouse).

Only purchase a detached dwelling in a neighborhood development which DOES NOT have HOA fees (home owner association). A detached dwelling is a house that sits all by itself with no other house attached to it.

Now print this off and stick it to your fridge door and study it every day![/c]
Pavona · 22-25, M
US dollars?
PrettyTroubles · 22-25, F
Vgore0304 · 26-30, F
Do you have a good credit score
PrettyTroubles · 22-25, F
[@1216,Vgore0304] I have good credit
Zaxel · 22-25, M
this is the wrong place to ask such a serious question. learn as much you as can on your own through articles/books and find someone trustworthy to assist you (not brokers)
PrettyTroubles · 22-25, F
I am I just wanted to see what advice the community has as well![@348365,Zaxel]
Zaxel · 22-25, M
[@417909,PrettyTroubles] try quora, way better quality content for that kind of info:
PrettyTroubles · 22-25, F
[@348365,Zaxel] thank you!
Pavona · 22-25, M
In Ireland you would need at least 30% deposit for a mortgage. Sorry I can’t be of much more help 🙁
PrettyTroubles · 22-25, F
[@1094549,Pavona] no it’s okay I appreciate the advice 😊
Pavona · 22-25, M
[@417909,PrettyTroubles] To be honest, lass, I would check with your bank and maybe local estate agents when you can 😊
Chevy454 · 41-45, M
You’re just about there. When we bought ours 3 1/2 years ago, I think we had to come up with 11,000-12,000 for a 210k home
Chevy454 · 41-45, M
And we sold it in October and made a good profit. We got lucky at the right time. [@417909,PrettyTroubles]
PrettyTroubles · 22-25, F
[@1004204,Chevy454] that’s amazing and inspiring. I’m really excited. Because I’m starting young and going to make my way up
Chevy454 · 41-45, M
Good for you!! Good luck!!😃😃[@417909,PrettyTroubles]
themistocles160 · 36-40, M
I believe with an fha loan you need 3%. So you are in pretty good shape with $10,000 but there is also title insurance and taxes.
Stereoguy · 56-60, M
Check into Freddy Mae and Fanny Mac. You can get in there with as little as 2% down and they will even lend you money to upgrade it.
sure :
1. have a quality certified house inspection - one found a buried oil tank at a house my buddy bought / cost the seller almost 12000.00 to fix per EPA , and we had a roof leak that cost almost 5000.00 to fix but was covered do to the inspection .
Another friend did not bother to have an inspecting / later his dad was putting up shelves in the finished basement only to find the wall pushed in 4" / had to dig out and pull the walls back = 7000.00 dollars , later they had squirrels in the attic - holes under the rain gutters .

2. take your time to inspect the house yourself , fresh paint and rug can hide things . Dont be afraid to poke into things

3. age of furnace, water heater, AC and other appliances . Are they gas or elec?

4. Slope of yard for drainage, are there any easements , right of ways, free of leans / back taxes .

5. when you shut the doors is the space around them equal ?

6. radon test ?

best to find and download home buyers inspection lists can check office max etc they may have some .
Ps. and look at all kinds of homes , this will give an eye for the things you dont like . And if something has been very recently fixed up beware, it maybe hiding something that was a quick fix for sale.

Any questions just ask and I will do the best I can

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