More Bread

This is my quest to get MORE BREAD (ie money), get rid of debt and other random things in my life.

Monday, October 02, 2006

Buying House with no money down?

One of the things I want to do is buy a house. But where I live the median house price is Seattle is $405,000. That is way out of my league. I've been thinking (not too seriously) about the no money down offers I see everywhere. FreeMoneyFinance has a good answer to whether that type of loan makes since. NO!!! That's what I was leaning towards as well. His post is based on a Kiplinger Report that lists the following reasons for not buying a house with no money down:
  • Saving for a down payment will lower their costs and give them both security and flexibility.

  • Equity in your home also gives you a source of cash in an emergency.

  • The bigger the down payment, the lower your monthly payments, which may mean one of you can afford to stop working, if you wish.

  • Buying a house with no money down comes at a price. With less than 20% equity in a home, you'll generally have to buy private mortgage insurance, which costs up to 1% of the loan amount.

Makes sense to me.  The three things I really want to do is payoff our debt, have a decent sized emergency fund and have enough money to responsibly buy a house. Though our debt is a long way from being paid off, we do have $1000 set aside for an emergency. It's not much, but is better than nothing. That'll pay rent and buy us food for a month or so. It doesn't look like we'll be able to pay a house anytime soon.



Post a Comment

<< Home