HAN, learn me about FHA Loans
it's my D in a B
Joined: Aug 2001
Posts: 24,787
Likes: 1
From: Your Mom's House
They do it all the time. :dunno:
The catch: the house has to pass FHA standards, which means it has to be in good shape with no structural, major systems or roof problems. You can't fix these yourself, the house has to be in good shape in order to even qualify with. The neighborhood must also pass FHA standards... which generally means it has be above a certain % owner occupied (not sure what the number is), this applies to condo complexes as well. If there are a lot of renters in the neighborhood, you wont qualify.
And, on a personal note, I have to agree with qtiger... if you can't afford to buy a house, don't do it. 3% down payment is nothing. One mediocre year is all it would take to wipe out all of your equity and put you in an upside-down situation (i.e. you owe more on the house than it's worth... that shit is for cars, not homes). It used to be standard practice to require 20% down for all home loans, then they got into seconds, and eventually everything deteriorated into "Hey, you want to buy a house? Sure, why not!?!" Buying a house should require a saved up heap of money... it's not just insurance for the lender, it's insurance for you. If the mortgage industry had stuck to their guns on qualifications for financing, our economy wouldn't be in the shitter right now.
The catch: the house has to pass FHA standards, which means it has to be in good shape with no structural, major systems or roof problems. You can't fix these yourself, the house has to be in good shape in order to even qualify with. The neighborhood must also pass FHA standards... which generally means it has be above a certain % owner occupied (not sure what the number is), this applies to condo complexes as well. If there are a lot of renters in the neighborhood, you wont qualify.
And, on a personal note, I have to agree with qtiger... if you can't afford to buy a house, don't do it. 3% down payment is nothing. One mediocre year is all it would take to wipe out all of your equity and put you in an upside-down situation (i.e. you owe more on the house than it's worth... that shit is for cars, not homes). It used to be standard practice to require 20% down for all home loans, then they got into seconds, and eventually everything deteriorated into "Hey, you want to buy a house? Sure, why not!?!" Buying a house should require a saved up heap of money... it's not just insurance for the lender, it's insurance for you. If the mortgage industry had stuck to their guns on qualifications for financing, our economy wouldn't be in the shitter right now.
snitches get stitches
Joined: May 2002
Posts: 49,696
Likes: 1
From: Portland, OR
They do it all the time. :dunno:
The catch: the house has to pass FHA standards, which means it has to be in good shape with no structural, major systems or roof problems. You can't fix these yourself, the house has to be in good shape in order to even qualify with. The neighborhood must also pass FHA standards... which generally means it has be above a certain % owner occupied (not sure what the number is), this applies to condo complexes as well. If there are a lot of renters in the neighborhood, you wont qualify.
And, on a personal note, I have to agree with qtiger... if you can't afford to buy a house, don't do it. 3% down payment is nothing. One mediocre year is all it would take to wipe out all of your equity and put you in an upside-down situation (i.e. you owe more on the house than it's worth... that shit is for cars, not homes). It used to be standard practice to require 20% down for all home loans, then they got into seconds, and eventually everything deteriorated into "Hey, you want to buy a house? Sure, why not!?!" Buying a house should require a saved up heap of money... it's not just insurance for the lender, it's insurance for you. If the mortgage industry had stuck to their guns on qualifications for financing, our economy wouldn't be in the shitter right now.
The catch: the house has to pass FHA standards, which means it has to be in good shape with no structural, major systems or roof problems. You can't fix these yourself, the house has to be in good shape in order to even qualify with. The neighborhood must also pass FHA standards... which generally means it has be above a certain % owner occupied (not sure what the number is), this applies to condo complexes as well. If there are a lot of renters in the neighborhood, you wont qualify.
And, on a personal note, I have to agree with qtiger... if you can't afford to buy a house, don't do it. 3% down payment is nothing. One mediocre year is all it would take to wipe out all of your equity and put you in an upside-down situation (i.e. you owe more on the house than it's worth... that shit is for cars, not homes). It used to be standard practice to require 20% down for all home loans, then they got into seconds, and eventually everything deteriorated into "Hey, you want to buy a house? Sure, why not!?!" Buying a house should require a saved up heap of money... it's not just insurance for the lender, it's insurance for you. If the mortgage industry had stuck to their guns on qualifications for financing, our economy wouldn't be in the shitter right now.
So, in a bad year, your equity is gone. Unless you're flipping your house, who cares? Real estate will continue to increase in value in the long run, so unless the person sells the house quickly after buying it, a drop in equity due to natural market fluctuations isn't the end of the world. And plus, an FHA loan isn't meant for real estate investment/flipping as you said.
it's my D in a B
Joined: Aug 2001
Posts: 24,787
Likes: 1
From: Your Mom's House
Yeah, but it leaves a pretty small margin of error. Believe me, I deal with people all the time who are forced to sell before they originally intended to. Family, health, divorce, job relocation, etc. People say that its fine because they'll be there for a good ten years, but in reality, people rarely stay in the same place that long.
And I'm not necessarily saying you have to have 20% either... in CA (or even in Boulder) that would be plain-old impossible for most people. But you should have a pretty decent chunk, if not to put towards your down payment, then at least to have in cash reserves. For someone in a situation like red94teg, if you can make the payments, and you're comfortable with it, fine. Go ahead and put down a 5% down payment if it suits your monthly or long term needs. But be damn sure you've got another 5-10% in the bank somewhere because if you're layed off, injured or whatever... and you can't make your payments, you'll be out of options pretty quick.
And I'm not necessarily saying you have to have 20% either... in CA (or even in Boulder) that would be plain-old impossible for most people. But you should have a pretty decent chunk, if not to put towards your down payment, then at least to have in cash reserves. For someone in a situation like red94teg, if you can make the payments, and you're comfortable with it, fine. Go ahead and put down a 5% down payment if it suits your monthly or long term needs. But be damn sure you've got another 5-10% in the bank somewhere because if you're layed off, injured or whatever... and you can't make your payments, you'll be out of options pretty quick.
