Most people renting recognize that home ownership is the way to go, if you can afford it, but simply don't have the 5%, 10% or 20% to put down on a home. Add closing costs of a few thousand dollars, moving expenses, and owning a home seems out of reach. Or is it? And whats the harm of renting one more year... it is only $1400 per month right? But it is not, it is $1400 x 12, or $16,800, real money.
Here's the good news.... If you pay $1200-1500/month or more for rent and have decent/good credit, you can buy your first home for about the same cost as a new lease! How is this possible? With the return of the NO money down loan! Ok, so no down payment, but what about closing costs? A good buyer agent (I'd like to apply for the job if you don't have one already!) will be able to, in most cases, negotiate a deal for the Seller to pay the vast majority of your closing costs.
You'll still need $1,500 - $2,500 saved up for various expenses, the remaining closing costs and fees but that's less than first and last months rent! You'll also want to keep in mind that when you close on a home, the first mortgage payment isn't due until the next full month. For example, if you closed on January 10, 2015, your first payment wouldn't be due until March 1! (Paying February interest)
Take a look at the various No Money Down loan types below. If you'd like to find out more about these loan types or get pre-qualified click on the Start Pre-Qualification button at the end of each loan description, or give Bobby McDonald a call at (704) 351 - 1519
First Time Home Buyers (FHA, NC Bond and Variants)
Several of our favorite local lenders have variations on the FHA program that allow first time home buyers to get into a home for no money down. For example, the NC Grant program provides buyers with 5% for a down payment, but FHA only requires 3.5% down, so the extra 1.5% can be used to offset closing costs or to buy down your interest rate. For most first time home buyers looking for a no money down loan, this is the way to go (if you don't fit into any of the other loan categories below this is definitely the way to go). Note that this isn't the normal FHA program, but rather local lenders who have created their own twist on it to save you the down payment!
Call Olan or Donna today to get started. Mention the McDonald Group to save $250 in closing costs!
North Carolina is home to the 2nd largest state employee's credit union in the country (NC SECU) and they have some great no money down options for their members. Count me as a fan! Any state or local employee can become a member, and sign their immediate family up as members too. The no money down loans available from NC SECU are some of the best around in my experience. The current program is a 5-Year ARM (adjustable rate mortgage) with no change to the rate for 5 years guaranteed, and sensible limits on possibly rising rates thereafter. If an adjustable rate (ARM) sounds scary, here are the positives: you save significantly on your payments AND you can refinance or move before the end of 5 years if needed (if you think the interest rate is going to jump up). If interest rates do not rise significantly then you may choose to do nothing. No PMI is required, reducing your monthly payments and there are no application or credit check fees. In addition to the NC SECU no money down loans, First Citizens Credit Union and Community One also offer no money down loans to their members in NC. Find out more about credit union loans.
Government Guaranteed Loans: VA, USDA
VA loans are a great way for active military and veterans to buy a home for $0 down. In addition to no money down, VA loans do not require private mortgage insurance (PMI) which will reduce your monthly payments. You'll need to have VA eligibility, decent credit to qualify, fall within the prescribed debt ratios and several other requirements to qualify for the loan but for most active military and veterans this is the loan of choice up to $417,000. Find out more about VA loans.
USDA loans are available in more rural areas (have to check to make sure the address qualifies) often right on the edge of suburbia. The USDA guarantees loans with no money down, provided you don't make too much money, or have too many assets. ( you can't have a 20% down payment sitting around you don't want to use) It's important to note that while the loan program rules are set by the government, you don't have to be in the military or government to use this loan type. It is property specific, (See 8 USDA homes in Mecklenburg County) and in addition to area requirements, income and credit restrictions apply. Find out more about USDA loans.
New Physicians and Dentist Loans
These are great for new physicians or dentists (some also works for fellows or residents). While the details vary slightly from program to program, several lenders in Charlotte will provide no money down loans on homes up to $1,000,000 for qualifying physicians and dentists! How is that possible? These banks portfolio your loan instead of selling it to Fannie or Freddie. This means that they want you as a lifelong customer so they give you a good deal on your first mortgage. Interestingly, several will also provide 3% down payment loans on homes above $1M. Even cooler, if your student loans are in forbearance then they don't count against your debt ratios! You will need excellent credit (min 720 FICO) and income reserves do apply.
Call Lance today to get started. Don't forget to mention the McDonald Group to save $250 in closing costs!
Due to low interest rates, the ability to make Sellers pay closing costs and the return of the NO money down loan, home ownership has never been easier to grasp. With interest rates set to rise in 2015, why wait? You'll pay more and get less home. Remember when looking at that lease to renew, you're not agreeing to pay $1500/mo, you are agreeing to pay $1,500 x 12 months, or $18,000! That number, plus the rise in the interest rates and home prices is the opportunity cost of waiting another year before you buy.***All the loan info in this post is accurate at the time of this writing but obviously loan packages change over time. Restrictions apply, and each lender has their own list of requirements. Click on one of the FIND OUT MORE links or contact Bobby McDonald at (704) 351-0987 for the most up to date no money down loan information and details.***
Author:Connie Massetti Phone: 704-340-5967 Dated: February 6th 2015 Views: 530 About Connie: Licensed agent assistant who coordinates with McDonald Group clients and agents during all aspects o...
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The McDonald Group at Wilkinson ERA is a group of professionals, dedicated to helping our Clients win in real estate. Expert and honest advice, local area knowledge, and seriousness of purpose but with folks who don't take themselves too seriously. The founder Terry McDonald, was a builder for 20 years, and has been a broker for the last 13 years. Buying a home or selling, first home buyer or relocating to Charlotte,the McDonald Group is here to serve. Our client list includes first home buyers to luxury homes, professional athletes, business owners and physicians. From in town to South Charlotte, Lake Norman too, we know Charlotte.
The Group's core values are all about integrity and market expertise. We look out for their clients interest above all others. We are a learning organization, and big believers in training and lifetime learning. Sellers know us for our technological savvy, our aggressive marketing, and the ability to consistently beat the averages in Days on Market. Buyers love us, we never pressure anyone, yet were able to save our Buyer clients 44% off the market average in 2013- and now that the market has changed we win more than our fair share of multiple offer situations.
Reviews on Zillow
"It was a great pleasure to work with Terry McDonald. English is not my first language so forgive any mistakes. The first time we met Terry was 5 ... more "
by polina katz
"I worked with Bobby on both buying and selling my home in Charlotte. He is so personal and cares about finding the perfect home for his clients! I ... more "
"Terry was exactly the agent we needed for our relocation from the New York area to Charlotte. We first explored a move to Charlotte a couple years ... more "
The Cost of Renting vs. Buying in the US Less to Buy than Rent? L
"Relocating to Charlotte from California, we were unfamiliar with the area. Bobby was more than accommodating when it came to showing us homes in different areas. He made us feel relaxed & was always patient with our energetic little ones! He helped us propose a fair offer on a beautiful home & we are indebted to him for the flexibility & know-how he exhibited through the whole process. We love Bobby!"