If you can’t afford a down payment, should you still buy a house?

Yes, if rentals in your area are much higher than a mortgage payment would be. There are many options to buy a home. Don’t overlook for sale by owner (FSBO). If you do go the FSBO route, just be sure to use an attorney for a few hundred bucks to close and a escrow agency to manage the amortization and payment schedule. Escrow fees are cheap and you can split it annually with your seller. Many people that own their property out right would rather have a stream of income rather than all cash, especially if they want to avoid capital gains taxes. You can set terms that work for you and the seller. You may need to refinance in 10 years our so to pay them or the estate off, but you get all the advantages of home owner ship.

If you are a veteran, you could use a VA loan for no down payment. You could also consider a down payment assistance program such as CalHFA or Sapphire Grant (in California) which can cover your down payment and closing costs. You may close with minimal out of pocket expenses. You may consider the CalHFA from a minimum 640 fico score and the Sapphire Grant from a minimum 620 fico score up to 424k.

Your qualifications will be determined by your credit profile, debt to income ratios, fico scores, loan program and how much you want to invest into the down payment and closing costs. Your fico scores can be raised within 3-4 days in most cases to qualify for programs, rates and terms as necessary.

Depending on your fico scores you may qualify FHA from fico scores between 500-579 with 10% down or minimum 580 fico score may qualify FHA 3.5% down up to 424k. You may consider 3% down conventional from a minimum 620 fico score or even 5% down conventional with NO Mortgage insurance (Lender paid MI) up to 424k.

Be creative and don’t give up.home ownership is rewarding. It’s like having a baby, if you wait till your totally ready that day will never come.
We learn by doing, ask questions, seek advice, and persevere.