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I've purchased 3 homes with no money down. There are stipulations though. On each purchase, I had to have 12 months worth of mortgage in my bank and I believe it cost me 1/2 a point. I've also gone no doc on my loans as well due to not wanting to have to bring hundreds of stubs, and explaining why they are all from porn companies. This cost me a point as well.
Why did I purchase with nothing down? Because my lender broke it down, and my monthly savings with 0 down vs. 5% down came to $50 a month. $16,250 down would take me 27.08 years to recoup with a $50 savings per month based on a $325,000 home value. I'd rather have a sum of money like that working for me in some other manner instead of saving as measly $50 a month.
If you're putting money down, it's best to go 20% down so that mortgage insurance isn't an issue. At least that would save you a few hundred a month.
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