Redwood Real Estate Blog

We will post articles that will help you buy or sell your home.  These articles will help walk you through the process and ensure that you have an easy transition.

June 12, 2017

Buying a Home With Zero Money Down

Now Grants Pass real estate is more attainable than ever before.

So how do you go about getting a Grants Pass home with no down payment? There is a little bit of a process to it. But don’t worry, we are going to spell it out here, and make it really easy.

  1. Get pre-qualified

This is important and you should make sure that you know what you can buy. Do not skip this step. It will save a lot of time and heartache in the future if you take the time to complete it.

Finding a good lender is important.  Make sure that they have the ability to get the job done and that they are competent.  We deal with a lot of different lenders and would be happy to refer someone to you.

You may think that your credit will keep you from buying a home.  the best advice I can share is to let the loan officer determine it.  You may find that you are ready to buy now.  If not, the loan officer will be able to guide you to be able to buy in the shortest amount of time possible.

  1. Find a Realtor

Once you are approved, you can start looking for your home. The Realtor will be able to start sending you the homes that meet your criteria. They will also be able to find homes that are in an eligible area.

Find a full time agent that can dedicate the time needed to respond quickly to our fast changing market. Our team of Realtors will jump quickly when a home comes on the market so you have a fair chance of seeing it and making an offer that can be accepted.  

  1. Write your offer.

Once you find a home that meets your needs, you can write the offer. (Actually the Realtor will write it) Then in a short amount of time, with an accepted offer, you can be living in your own home.

A qualified Realtor will make sure that your offer is competitive and give you the best chance of submitting the winning bid.  There are tricks to the trade to make sure your offer stands out.

VA Loans for Grants Pass real estateVA Loans

To be eligible for a VA loan, you will need to have served some time in the military. The VA loans offer the best loans by far. So if you are eligible, you should take advantage of them.

You will get a 100% loan, with the lowest interest rates on the market. Additionally, you don’t have any mortgage insurance. This can easily save you a couple hundred dollars a month.

Another great feature of the VA loan is that you can qualify with a much lower credit score. In the past few years, loans have been harder to qualify for with higher credit standards. But you can get this loan with significantly lower credit standards.

Disabled Veterans

If you are a disabled veteran, with a rating of zero percent of more, your loan comes without any VA Funding Fee. This can save you 2-4% of the loan amount in fees.

Veterans (not disabled)

You get the same great loan as a disabled veteran, but the funding fee will be added to your loan amount. The actual percentage will depend on if you have used the VA loan in the past.

What if you have money to put down?

It you have saved up some money and can put 20% down, VA loans are may not be the best deal out there. You can get a regular conventional loan since you won’t have any mortgage insurance. This way you can probably get a better interest rate, which means a lower payment.

USDA Loans

USDA loans have gained immense popularity. They offer the ability to buy a home with no money down. But there are some caveats to the program.

Let me restate something. If you are eligible for a VA loan, that is the way you should go. But if you had no military history, this is the second best program.

Eligible areas

The main thing to know is that USDA loans are usually only eligible in rural areas. This usually means outside of city limits.

But from time to time, the program opens up city areas as well. One of the more recent ones was the inclusions of homes in the Grants Pass city limits. So now all homes in Josephine county are eligible.

In Jackson County, there are a lot of homes that are eligible, but they will have to be outside Medford City limits. Klamath County is completely eligible also.

Each area has its own eligibility criteria and you may have to spend a few minutes with a professional to make sure the home you like is in a qualified area.

Important!

One thing to note is that you cannot buy a manufactured (mobile) home with a USDA loan.

Is it really no money down?

These loans are truly no money down. But the thing that most people forget is there are some expenses involve in the loan. You ARE getting a loan amount of 100% of the purchase price. But you ARE going to have a little money to pay some fees.

Earnest money

Most times you are going to have to put some earnest money down to show you are going to really try to buy a home. Anything around $500 is reasonable. You may however find that the seller wants more earnest money. This is your Realtors job to make sure that the earnest money is affordable to you.

Home inspections.

A home inspection is a necessity when buying a home. In Southern Oregon you will pay about $350 – $450 for one. this is NOT included in the loan.

Appraisals

You will have to have an appraisal. It is required to get the loan. These can run around $600 - 800. They may or may not be able to include them in the loan. I would recommend having the money available just in case.

Appraisals have gotten more difficult to get in regards to timelines.  It is important that your Realtor knows that the time frames need to be extended to accommodate the appraisal turn times.

Other inspections.

You may need water tests (like well flow) or septic inspections. These will also cost a few hundred dollars.

So you can see that 100% financing does not mean no money out of pocket. It just means you don’t have to put a down payment on the home.

Now What?

Why wait? if you have wanted to buy a home, but haven’t figured out how, now is the time. You could be in a home in a matter of just a few weeks. Just think – your own home. And you didn’t need any down payment to make it happen.

If you would like to talk to someone about getting started, call or text me.  541-218-5778.  I will be happy to get you on the path to home ownership.

If you would like to start looking for homes, check out Grants Pass Oregon Homes For Sale.

 

Posted in Buyers
June 10, 2017

How Much is My Down Payment

How Much Down Payment is Required?

 

House Made of MoneyIt gets confusing sometimes when you are getting started on your home search.  How do you know what the amount down you will need for your loan is?  The following is a basic guideline for you to be able to see what amount you need to have to be able to buy a home.  These are not rules, but simple offer a guideline to look at.  It is important to talk with a qualified loan officer to make sure you are in the best program for your needs.

Let’s assume that you are buying a home for $250,000.  There are less expensive homes, but this is a good median price in Southern Oregon.

As a point of clarification, no money down does not factor closing costs.  There are fees associated with the loan.  But there are tricks of the trade to getting around those.  So, remember this: 

 

Your down payment is only part of the money required to close on your new home.

 

-          0% Down.  This is also no money down or zero dollars.

o   VA loan.  This loan is for Veterans.  Under most circumstances, it is the best loan out there for a low (or no) down payment.  This is the only loan in the list that does not have mortgage insurance.

§  Use it on manufactured homes or site built homes.

§  If you have a VA Disability rating, there is an additional bonus for you.

 

o   USDA.  A great loan option for someone getting into their first home.  Depending on the County you are trying to buy in, the home may not qualify for the program.  Some places it won’t work in the city limits. But in Josephine County, it is currently available in all areas, county or city.

§  USDA does not work on Manufactured homes.

§  USDA does have income caps determined by the size of your family.

 

-          1% Down.  This is equal to $2500.00

o   Special program.  Not available with all lenders.  Please call me if you have interest in this one.  I will direct you to the lender that can do this.

§  This is an FHA type loan with down payment assistance.

§  Can be used on Manufactured homes

 

-          3% Down.  This requires $7500.00

o   Conventional loans

§  Manufactured homes are OK

 

-          3.5% Down. Down payments on this one is $8750.00

o   FHA loans.  FHA loans have been a highly-used product due to the low mortgage insurance and low interest rates. 

§  Manufactured homes OK

§  There are maximum lending limits determined by the county you live in.

 

-          5% Down. Down payment totals $12,500.00

o   Conventional loans

§  Manufactured homes OK

 

-          20% down.  This is equal to $50,000 down.

o   The way to avoid mortgage insurance on your loan.  IF you don’t have 20% down, and you are not a Veteran, you will likely have mortgage insurance.

§  Manufactured homes are OK

You can put down any amount between these numbers and your payments will be reduced, since you are borrowing less.  But the numbers above are general guidelines for the minimum down payments for those programs.

 

 

Need more help with your down payment or closing costs?  Please feel free to contact us and we will walk you through it.

Posted in Buyers