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Posted: 8/30/2004 9:00:23 AM EST
Every one wants 20% down to purchase a home the conventional way. How can you by a house without a bunch of money down?

Anyone use the Carlton Sheets system?
Link Posted: 8/30/2004 9:02:20 AM EST
80/20 loan
Link Posted: 8/30/2004 9:03:41 AM EST
without money down
Link Posted: 8/30/2004 9:04:33 AM EST

Originally Posted By NoVaGator:
80/20 loan



What he said. You will need pretty good credit.
Link Posted: 8/30/2004 9:05:22 AM EST
join the army and get their loan
Link Posted: 8/30/2004 9:06:10 AM EST
I got one, I think it was a fanny mae, or freddy mac program.
Link Posted: 8/30/2004 9:07:05 AM EST
Can someone give a new home buyer a quick explanation of a 80/20 loan?
Just a quick overview...I am looking to buy early next year...this may be the way to go...

Thanks in advance for ideas
Link Posted: 8/30/2004 9:07:15 AM EST
[Last Edit: 8/30/2004 9:08:15 AM EST by SWIRE]

Originally Posted By TANGOCHASER:
Every one wants 20% down to purchase a home the conventional way. How can you by a house without a bunch of money down?

Anyone use the Carlton Sheets system?



I've got his system but it's not needed if you want a no money down loan. Most banks/mortgage companies will finance you with as little as 5% down. Most also offer some sort of 0% down loan. You will have the additional costs of PMI when you go over an 80% loan but it doesn't prevent you from getting the loan.

Somehow my brother managed a 0% down home loan, with no PMI, and with a decent interest rate. You just have to call around to find the deals.


As for Carlton's system, his program is mainly geared for investment properties not your home. He talks about lease options, owner financing, owner financing of the down payment, getting a partner...and so on. Just creative ways of financing.
Link Posted: 8/30/2004 9:07:21 AM EST

Originally Posted By TANGOCHASER:
Every one wants 20% down to purchase a home the conventional way. How can you by a house without a bunch of money down?

Anyone use the Carlton Sheets system?




I bought my house two years ago with 3% down, three things suck about little or no down payment:

1) You pay higher interest

2) Your monthly payment are higher

3) And you have to pay PMI, an extra $100.00 or so.
Link Posted: 8/30/2004 9:07:23 AM EST
[Last Edit: 8/30/2004 9:11:44 AM EST by jchewie]

Originally Posted By NoVaGator:
80/20 loan



I did it this way. Loan was $125k

No PMI either.
Edited to add
5.625% interest,
80% is a standard fixed 30 year. 20% is a 15 year home equity loan.
I could have gotten a half percent lower interest rate with 5% down, but I am using that money to do some other necessary improvements, and paying an extra $30 a month.

Consider taking a loan that will allow you to pay your principle and interest due each month, plus next month's principle. It will save you a bundle of interest and you will have the house paid for in 15 years.
Link Posted: 8/30/2004 9:08:54 AM EST

Originally Posted By macro:
Can someone give a new home buyer a quick explanation of a 80/20 loan?
Just a quick overview...I am looking to buy early next year...this may be the way to go...

Thanks in advance for ideas



80/20 loan. You take out the loan for 80% as your primary mortgage.
The 20% is another loan, to pay your down payment on.

Usually a shorter loan.

TXL
Link Posted: 8/30/2004 9:12:02 AM EST

Originally Posted By TANGOCHASER:
Every one wants 20% down to purchase a home the conventional way. How can you by a house without a bunch of money down?

Anyone use the Carlton Sheets system?




Easy, you just ignore any naysayers about the housing "bubble," keep telling yourself that "This time it's different," and you sign the loan docs for an 80% loan, then a 20% loan.

Do not come back here asking how to walk away from this situation when, yes WHEN you are upside down in this arrangement and you don't want to ruin your credit.
'

BTW, "This time it's different" is the most terrifying thing that an investor can say to a student of economic history.

When interest rates go up, banks will tighten the pool of qualified loan applicants. Prices will not just slow down, they will slip.

Those who got in under the wire thinking that they'd sell to some other guy for more $$, getting them off the hook for that looming "variable" portion of the loan that they can't afford, will be SOL.

In OC, Cali, we are looking at big problems, we have one of the highest percentages of people taking out variable loans, meaning that most can't afford the real payment once it kicks in.

When they are UNABLE to sell for an amount that will cover their balance, we shall see pretty monumental problems.

This is all IMHO, of course.
Link Posted: 8/30/2004 9:12:25 AM EST
Link Posted: 8/30/2004 9:12:30 AM EST

Originally Posted By jchewie:

Originally Posted By NoVaGator:
80/20 loan



I did it this way. Loan was $125k

No PMI either.



+1

Did 80/10 with 10% down. No PMI
and you have the mortgage interest
deduction on both loans.

Link Posted: 8/30/2004 9:16:37 AM EST
[Last Edit: 8/30/2004 9:17:03 AM EST by TheCynic]

Originally Posted By CITADELGRAD87:
Easy, you just ignore any naysayers about the housing "bubble," keep telling yourself that "This time it's different," and you sign the loan docs for an 80% loan, then a 20% loan.

Do not come back here asking how to walk away from this situation when, yes WHEN you are upside down in this arrangement and you don't want to ruin your credit.



OK: instead keep pissing away twice as much
as a mortgage payment on rent and not have
anything to show for it.

Great advice.

You going to tell me all about peak oil now too?


Link Posted: 8/30/2004 9:18:25 AM EST
I bought my home with NO money down, signature only, 80/20 loan with NO mortgage insurance. Its thru Wells Fargo, but you have to have 730 or better credit score.
Link Posted: 8/30/2004 9:20:43 AM EST

It's called a second mortgage. Just put your 10% down, and bite it with the PMI for a little while. Coutnrywide did us well so far.
Link Posted: 8/30/2004 9:37:17 AM EST

Originally Posted By TheCynic:

Originally Posted By CITADELGRAD87:
Easy, you just ignore any naysayers about the housing "bubble," keep telling yourself that "This time it's different," and you sign the loan docs for an 80% loan, then a 20% loan.

Do not come back here asking how to walk away from this situation when, yes WHEN you are upside down in this arrangement and you don't want to ruin your credit.



OK: instead keep pissing away twice as much
as a mortgage payment on rent and not have
anything to show for it.

Great advice.

You going to tell me all about peak oil now too?





As stated at the bottom of my post, "IMHO." He asked advice, I gave it. Do whatever you want.

As to "rolleyes," if you start with ZERO equity, then the market dives, tell me how much "anything" you'll have to show for that little investment scheme?

If you're comfortable that you can start at zero cushion and the market will continue to rise, go for it. "This time it's different."
Link Posted: 8/30/2004 9:38:49 AM EST
Link Posted: 8/30/2004 9:46:19 AM EST
Link Posted: 8/30/2004 9:56:23 AM EST
[Last Edit: 8/30/2004 9:57:07 AM EST by TANGOCHASER]

WOW!!!

OK, if you wanna know how, listen up....

Get you mtg. co. to approve you for an FHA loan. The minimum down pmt is 2.65% of the purchase price (you will need to come up with the other .35% in cash as closing costs for a total of 3%). FHA allows not-for-profit companies to assist buyers in the aquisition of the needed down pmt.

In a nutshell, the seller agrees to pay for your down payment (plus a fee that ranges from $350 to 1% of the requested down payment amount). This money, at funding, is passed by the title company from the seller's proceeds to the down pmt assistance not-for-profit company (where they remove their fee) and then back to the title company for use as your down payment.

As a practical measure, this seller contribution usually takes the place of a discounted sales price for your new house. In this way, the seller will net the same money and the sales price will not need to be raised, avoiding a possible problem with appraised value of your new home being less than the sales price....a big NO NO with FHA.

Here for more questions....



I think I understand this. Does a VA loan guarantee help this equation?

Any benefit or difficulties to purchasing a VA foreclosre property?
Link Posted: 8/30/2004 10:03:29 AM EST
My credit union offers a First Time Homebuyer's Loan. 103% of purchase price. 10 year fixed, 20 year variable.

Has worked out good so far.
Link Posted: 8/30/2004 10:06:09 AM EST
Link Posted: 8/30/2004 10:10:34 AM EST
[Last Edit: 8/30/2004 10:11:16 AM EST by Paul]
Link Posted: 8/30/2004 10:16:02 AM EST

Originally Posted By CITADELGRAD87:

Originally Posted By TheCynic:

Originally Posted By CITADELGRAD87:
Easy, you just ignore any naysayers about the housing "bubble," keep telling yourself that "This time it's different," and you sign the loan docs for an 80% loan, then a 20% loan.

Do not come back here asking how to walk away from this situation when, yes WHEN you are upside down in this arrangement and you don't want to ruin your credit.



OK: instead keep pissing away twice as much
as a mortgage payment on rent and not have
anything to show for it.

Great advice.

You going to tell me all about peak oil now too?





As stated at the bottom of my post, "IMHO." He asked advice, I gave it. Do whatever you want.

As to "rolleyes," if you start with ZERO equity, then the market dives, tell me how much "anything" you'll have to show for that little investment scheme?



Whether he starts with zero or 20%, if the house
market crashes, as you seem to suggest, he'll be
in the same boat: owing a hell of alot more than
the underlying property is worth.


Originally Posted By CITADELGRAD87:
If you're comfortable that you can start at zero cushion and the market will continue to rise, go for it. "This time it's different."



Sorry for being a asshole - I'm just sick of
people talking about the "housing bubble".
I just plain don't believe that entry-level
houses (< $300K) are suddenly going to
go back to $50K because of a bursting
"bubble". I would agree about higher-end
homes, however. Of course, someone who
buys a $600K house with no money down
deserves to get taken to the cleaners.

I don't want people to continue to piss away
$1500 / month on rent when they can "own"
for $500.

YMMV.
Link Posted: 8/30/2004 10:16:05 AM EST
Link Posted: 8/30/2004 10:17:18 AM EST
[Last Edit: 8/30/2004 10:20:30 AM EST by TheCynic]

Originally Posted By wiggy762:
HUGE interest rate charged on the 20% second mtg!



Mine was only 4%...

eta: I should refi, however, because my house
has appreciated past the initial 10%. So I am
technically paying 4% for no reason.
Link Posted: 8/30/2004 10:18:24 AM EST
Link Posted: 8/30/2004 10:21:27 AM EST

Originally Posted By wiggy762:
Better than 720 middle score, huh?



Yeah. Looks like being anal about your
credit pays off.


Link Posted: 8/30/2004 10:22:04 AM EST
What wiggy said. Espically about the VA part.
For a FHA try and put 3% down, and you can use what wiggy described (known as buyers assistance or a gift of equity) for your closing costs, if the seller is agreeable.
I am not sure what kind of rates or penalties you will be hit with if you do FHA 0% down.
Link Posted: 8/30/2004 10:22:09 AM EST
Link Posted: 8/30/2004 10:22:27 AM EST

Originally Posted By Paul:

Originally Posted By TANGOCHASER:

I think I understand this. Does a VA loan guarantee help this equation?

Any benefit or difficulties to purchasing a VA foreclosre property?



Do you have a VA loan available? I went to get out of the Navy class last week and have my book around here somewhere. It covered the VA loan program.



You can also check out www.homeloans.va.gov/

Depending on what credit union you might be in, that might help also. I'm in Navy Federal and they have a loan called Veteran's Choice. The eligibility requirements are the same as the VA, except that you don't use your certificate. Also, to everyone else, it is a conventional loan. This means that you don't have a lot of the same stringent requirements as a VA loan.
Link Posted: 8/30/2004 10:23:12 AM EST
The coastal area house prices seem to be completely out of whack, utterly insane. Outside the boom areas prices still seem sane.
Link Posted: 8/30/2004 10:29:24 AM EST
[Last Edit: 8/30/2004 10:30:18 AM EST by TANGOCHASER]
I already have my certificate of eligibility. I am going back to the US next summer from Germany. I will probably go back to Montana if I get a job with a security compnay in Iraq. If I get a cheesy TDA assignment, I could land anywhere. I have 4 kids and need a large home and of course the large garage for a weapons workshop.

When I hit the US. What is my first step if I pursue the VA loan?
Link Posted: 8/30/2004 11:17:14 AM EST
Link Posted: 8/30/2004 11:18:24 AM EST

Originally Posted By BeetleBailey:
It's called a second mortgage. Just put your 10% down, and bite it with the PMI for a little while. Coutnrywide did us well so far.



PMI Sucks ASS
Link Posted: 8/30/2004 11:24:33 AM EST
Link Posted: 8/30/2004 11:35:03 AM EST

Originally Posted By thelastgunslinger:

Originally Posted By NoVaGator:
80/20 loan



What he said. You will need pretty good credit.



They are right just need good credit and/or verifiable income.
If no verifiable income then--Stated income mortgage and A+ credit rating
it is doable
Link Posted: 8/30/2004 11:37:18 AM EST
If you can't put at least 20% down, you can't afford to be a homeowner.

Owning a home is expensive to say the least.
Link Posted: 8/30/2004 11:39:33 AM EST
[Last Edit: 8/30/2004 11:40:03 AM EST by JosieWales]

Originally Posted By MrClean4Hire:
If you can't put at least 20% down, you can't afford to be a homeowner.

Owning a home is expensive to say the least.



With all respect I disagree.
Homeownership is the most important investment we can make--because you can live in it too
Link Posted: 8/30/2004 11:43:53 AM EST

Originally Posted By JosieWales:

Originally Posted By MrClean4Hire:
If you can't put at least 20% down, you can't afford to be a homeowner.

Owning a home is expensive to say the least.



With all respct I disagree.
Homeownership is the most important investment we can make--because you can live in it too




Check bankruptcy rates in your state.

How many actually owned their home?
How many had second mortgages ?
Statistics say 80% loan/value ratio lowers your chances of going bankrupt.

Its common sense really, you are trying to buy something you cant afford.
If you make enough money to pay the payment why have you not saved any cash for a down payment?
Is getting by good enough or would you rather have some money left over?


Just my .02, you do 100% finance and your asking for murphy to come live with you.
Link Posted: 8/30/2004 11:44:42 AM EST
That may be, but it is cheaper than renting.

TR
Link Posted: 8/30/2004 11:46:40 AM EST
+1
Link Posted: 8/30/2004 11:47:47 AM EST

Originally Posted By MrClean4Hire:

Originally Posted By JosieWales:

Originally Posted By MrClean4Hire:
If you can't put at least 20% down, you can't afford to be a homeowner.

Owning a home is expensive to say the least.



With all respct I disagree.
Homeownership is the most important investment we can make--because you can live in it toohr



Check bankruptcy rates in your state.

How many actually owned their home?
How many had second mortgages ?
Statistics say 80% loan/value ratio lowers your chances of going bankrupt.

Its common sense really, you are trying to buy something you cant afford.
If you make enough money to pay the payment why have you not saved any cash for a down payment?
Is getting by good enough or would you rather have some money left over?


Just my .02, you do 100% finance and your asking for murphy to come live with you.



Pointed and lucid argument though
Link Posted: 8/30/2004 11:49:55 AM EST

Originally Posted By The_Rock:
That may be, but it is cheaper than renting.

TR



Depends on your lifestyle. You can rent for $1000 a month, or do like I did. My rent was $225 a month.
Nothing fancy and my wife hated it. In 2 years I paid cash for our first house. You ever live debt free, there is no going back. Debt is taught as a needed thing to make the world go round. I say b.s.
Link Posted: 8/30/2004 11:51:22 AM EST
Link Posted: 8/30/2004 11:53:50 AM EST
VA loan.
Link Posted: 8/30/2004 12:01:09 PM EST
I joined the Marines and got a VA loan.
Link Posted: 8/30/2004 3:45:59 PM EST

Originally Posted By wiggy762:
Oh, and another thing...

...everyone with an 80/20 that has been in their loan for 12 months w/o 30 day lates on consumer credit or mortgage credit seriously needs to inquire about a refi into one loan. I have done the numbers every way to Sunday and the savings of no PMI is more than made up by the HUGE interest rate charged on the 20% second mtg!

You guys........



My timing worked out pretty good on this. I did the 80/20. Waited a year and refianced into one loan. What worked out good was that property values were skyrocketing at this point. Even in that first year the money I was paying out on the second was recuperated at the end of the year when I did my taxes.
Link Posted: 8/30/2004 4:38:02 PM EST

Originally Posted By TheCynic:

Originally Posted By CITADELGRAD87:

Originally Posted By TheCynic:

Originally Posted By CITADELGRAD87:
Easy, you just ignore any naysayers about the housing "bubble," keep telling yourself that "This time it's different," and you sign the loan docs for an 80% loan, then a 20% loan.

Do not come back here asking how to walk away from this situation when, yes WHEN you are upside down in this arrangement and you don't want to ruin your credit.



OK: instead keep pissing away twice as much
as a mortgage payment on rent and not have
anything to show for it.

Great advice.

You going to tell me all about peak oil now too?





As stated at the bottom of my post, "IMHO." He asked advice, I gave it. Do whatever you want.

As to "rolleyes," if you start with ZERO equity, then the market dives, tell me how much "anything" you'll have to show for that little investment scheme?



Whether he starts with zero or 20%, if the house
market crashes, as you seem to suggest, he'll be
in the same boat: owing a hell of alot more than
the underlying property is worth.


Originally Posted By CITADELGRAD87:
If you're comfortable that you can start at zero cushion and the market will continue to rise, go for it. "This time it's different."



Sorry for being a asshole - I'm just sick of
people talking about the "housing bubble".
I just plain don't believe that entry-level
houses (< $300K) are suddenly going to
go back to $50K because of a bursting
"bubble". I would agree about higher-end
homes, however. Of course, someone who
buys a $600K house with no money down
deserves to get taken to the cleaners.

I don't want people to continue to piss away
$1500 / month on rent when they can "own"
for $500.

YMMV.



We have a 95+% overlap in philosophy here, Cynic. Renting blows, the last real deduction lies in home ownership. Anyone who can, should.

I don't think homes are going to tank to 25% of their current value, but starting off ON the bubble gives me the willies. ANY correction, 2%, 5%, etc equals a LOT of prople who will not be able to sell to anyone because it won't cover their note.

And I come from the land of $600,000 plus homes, which colors my perspective. We paid just over $620,000 ONE year ago, last month a similar home sold for $850,000+. That kind of "appreciation" scares the heck out of me. I for one am not planning on refiing and grabbing all that "money" I now have. That "equity" will dry up and blow away sooner rather than later.

To me, it's a function of what nut people can crack each month. People now buy houses like we used to buy cars, how much will it cost me per month? You hike interest rates, people will get less house for the same payment.
Link Posted: 8/30/2004 4:51:28 PM EST

Originally Posted By wiggy762:
Oh, and another thing...

...everyone with an 80/20 that has been in their loan for 12 months w/o 30 day lates on consumer credit or mortgage credit seriously needs to inquire about a refi into one loan. I have done the numbers every way to Sunday and the savings of no PMI is more than made up by the HUGE interest rate charged on the 20% second mtg!

You guys........



I just bought a home @ 125,900, 80/20 and am only paying 4.2% on the 20%, locked in for 4 years! Woo hoo! If you can avoid it, why put down any more $$$ than you have to? You've earned your credit, freakin' use it, but use it wisely!
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