Buying a home is one of the most rewarding accomplishments. It builds confidence, rewards hard work, and creates a path for future wealth building. However, the trend of assuming zero down means free, or at no-cost, seems to be prolific. Also, the lack of responsibility for having zero savings and expecting everyone else involved 'to make it work' is both disrespectful and unrealistic.
This post might come across harsh but its reality. Buying a home using a zero down or minimum requirement home loan doesn't negate responsibility to one's own purchase or sell. Sometimes the costs are more, which is all loan program dependent, and sometimes they are less.
Typical Costs to Purchase a Home
- Home Inspection
- Taxes & Insurance
But the Seller is Paying My Closing Costs
Awesome! Good. Your real estate broker (or yourself) helped negotiate those for you. However, those closing costs typically don't cover a home inspection and appraisal. Those are costs folks need to account for and have the money in the bank, now. Not later but now.
If you're wanting to buy a home and have zero money in the bank you're living a pipe dream. Don't expect everyone to bend over backwards if you're unqualified. Living paycheck to paycheck is not a bad thing. Sometimes it happens. However, if you're buying a home, a lender's underwriter doesn't want to see a borrower living paycheck to paycheck. It doesn't build confidence. Quite the contrary. It shows risk and underwriter's jobs are to minimize investor risk.
Be Better Qualified for a Home Purchase
Plan. Don't decide "today I'm going to buy a house" but plan.
- Talk to a REALTOR or loan officers about the steps.
- Learn how to get qualified for a home loan.
- Learn how much money it will take to purchase.
- Learn what can be expected of you.
Buying a home is a planning process and isn't something decided upon lightly as you don't buy and sell homes as easily as cars.