This was a poor decision for a number of reasons.

#1 as already pointed out, not being able to put a down payment on the house means you have no savings, which means you have no way to pay for incidentals. Even if you got a 100% financing (which is REALLY dumb because of #2), if there's a storm and your roof gets damaged, or heat goes out, or any other of a 100 things that can go wrong and need to be fixed immediately, you are fucking yourselves into a corner.

#2 If you are financing more than 80% of the mortgage, you are almost guaranteed to be hit with required private mortgage insurance. It's a lot harder to get around this now, since split loans are much harder to talk banks into than before the bubble burst. These can be 1.5-6% interest ON TOP of your mortgage loan interest. Given today's interest rates, this can be pay nearly double the interest on a home, for years.

#3 The market isn't going anywhere soon. You lose thousands of dollars buying a home, and 10-15% of the value of the home when selling it. You're putting yourself in a lose-lose situation by buying a 100% financed home right now. Renting will almost 100% be a cheaper financial decision.

Throwing money away on rent (where you have no equity) is a lot better than throwing away money on a mortgage (where you have negative equity, interest AND HUGE financial penalties for selling early).

Save and invest your money for another year or two. Buy your house when the market is more stable and you can put down 20-25% AND have 10-15k in savings.

9/21/2010 9:50:21 PM

^

Best advice in this thread. Buying a house without at least a 20% down payment (PLUS extra cash sitting around as emergency money) is crazy and asking for trouble.

A good article on the subject:
http://market-ticker.org/cgi-ticker/akcs-www?singlepost=2138002

9/22/2010 11:45:08 AM

So, as an update, we bought the house.

We closed this past Friday and could not be happier. We were also able to make a small down payment and put some away in savings for an emergency fund. Our apartment complex was able to renegotiate our lease and let us stay until we closed.

With our mortgage, PMI, and homeowners insurance, we are still paying the same amount we were with our apartment. Our interest rate is locked at 4.5%.

BB&T admitted their fault and actually refunded us the cost of the appraisal. According to our mortgage broker, BB&T is pulling out on a lot of the CHIP loans so if you are considering that avenue, do so with caution.

11/3/2010 3:32:22 PM

See......piece of cake

11/3/2010 3:34:51 PM

Quote :

"i did 0% down with paying closing costs in cash and it has worked out pretty good"

ditto...also, no PMI...my 2-year ARM just came around in may and it stayed where it was when i got the loan...which was 2% less than the lowest fixed i could fine and is now 2.5-3% lower

i have no complaints (yet)

[Edited on November 3, 2010 at 3:37 PM. Reason : .]

11/3/2010 3:36:01 PM

Should have bought a warehouse. I hear commercial properties are cheap cheap cheap. Can't beat the sq ft values, plus the ability to play indoor football at anytime is a bonus

11/3/2010 3:36:40 PM

^^^ha. And to think that you were one of the biggest naysayers ITT.

^^Good for you guys!

^I hear they are pretty drafty!

11/3/2010 3:37:31 PM

congrats on the house and welcome to home ownership!

11/3/2010 3:41:46 PM

Yeah, it's a cut throat sport, specially when those damn support columns block the punts. I swear, they never block for the opposing teams.

11/3/2010 3:41:50 PM

Congrats! Glad this all worked out for you.

11/3/2010 3:47:30 PM

I had dinner with a friend last night that is in the processing of doing this CHIPS loan with BB&T. I'll be curious to see if she runs into the same issues.

11/3/2010 3:49:50 PM

^^^Bastards! I appreciate a good blocked punt but not when the credit goes to a beam. I don't have a beam on my fantasy team!

^^Thanks

^Good luck to her!

11/3/2010 3:57:13 PM

Congrats!! I know how it feels. I went through several months full of bull shit before I was able to close on my house (many times it seemed like it wasn't going to happen). Been living in mine for three months now and I love it!

Good luck with everything related to the house (and everything else too)!

11/3/2010 8:28:49 PM