How To Buy A House With $10,000
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Just to be clear, this is not about buying a house for $10,000, this is about buying a house with $10,000. Two different things. For starters, you will need to have $10,000, which you will use for your down payment and to cover the cost of your home inspection, the appraisal and a year’s worth of homeowner’s insurance. All of those other closing costs, escrows and everything else will get paid, but not by you.
Last week, Thursday actually, Existing Home Sales data for July included a Median Sales Price of $234,000 for a home in the U.S. You can buy this house with 3.5% down payment FHA financing, using $8,190 of your $10,000 I-want-to-buy-a-house fund. A home inspection happens early in the home buying process and that will set you back about $600 (upfront). You will have to pay for the appraisal (also upfront), and that will drain another $400 from your $10,000 war chest. All of this will leave you with $810 to pay for your first year of homeowner’s insurance, which you will do shortly before closing.
Now for all of those other closing costs, escrows, “pre-paids” and everything else that will be due at closing, and there will be plenty of those. Annual real estate taxes come in all shapes and sizes and can vary significantly, add in title and recording fees, survey, lender fees and so forth could all add another $5,000 to $10,000 to the money you will need to buy this house.
This is the important part so pay attention; all of the “everything else due at closing” costs can be paid with a seller credit and a lender credit.
FHA mortgage financing allows a seller to contribute up to 6% of the purchase price towards your closing costs, escrows and everything else. For this house, that would be $14,040, which is more than what you would need (you don’t get to take the difference in cash when it is more than what you need). Besides, the seller may be willing to contribute to covering some of your closing costs but maybe not everything.
Let’s guesstimate the total closing costs, escrows and everything else bill is $7,500, and the seller agrees to pony up $5,000 of that in the form of a seller credit or contribution towards your closing costs. The remaining $2,500 can be paid using a lender credit resulting from par plus pricing.
Par pricing is market pricing, or whatever interest rate is offered with no additional costs (points) to the mortgage consumer. Typically, the zero point rate is par pricing and right now an FHA loan can be gotten for right around 3.75%. Par plus pricing would be an above market interest rate which generates additional revenue to the lender. That additional revenue becomes the lender credit that will pay for the rest of your closing costs. So if 3.75% is offered with zero points, 4.00% will generate close to $2,500 in additional revenue to the lender, which can be applied as a lender credit. Presto, closing costs, escrows and everything else are paid with a seller credit and a lender credit and not by you.
A seller credit, a lender credit and your $10,000 are all the ingredients necessary for you to finally become a homeowner.
In the interest of full disclosure, opting for a higher interest rate will result in a higher monthly mortgage payment and more interest paid over time. Buying this house with a 4.00% interest rate will cost you $32.86 more each month and $11,829.60 more in interest paid over the 30-year life of your mortgage, as compared to the 3.75% interest rate.
There are lots of quantitative and qualitative variables to consider here and individual financial circumstances are as varied as DNA profiles. This is a home buying strategy that needs to fit your financial profile, as well as your quality-of-life focus.
So tally up what you have managed to save, organize that big yard sale, rev up your eBay EBAY -1.00% seller prowess, look into borrowing against your 401K and see if you can cobble together enough of a dream fund to take a shot at this homeowner thing. All you need is $10,000.
What are typical expenses such as utilities, taxes, etc. for owning a home?
As you would expect with owning a home in any other area, you should plan for utilities such as electricity, gas, water and sewage. Depending on the size of the home and your usage. For example, in the Los Angeles area these expenses can range anywhere from $100 to more than $1,000+ per month. Property taxes are another expense, and the typical rate is 1.25% of the assessed value per annum. As with utilities, you should verify the taxes for the particular area and home you are thinking of buying prior to purchase. As for homeowners insurance, policies can vary greatly in cost depending on the size of the home, location, upgrades, type of coverage, etc. The annual expense could be under $1,000 for a small home to well over $10,000 per year for a large or high value home. It is recommended you check with a local insurance broker which we will help you to do, who can give you estimates, prior to making any home purchase. Condominiums and even some single family homes also come with an added expense of a homeowners association. The homeowners association covers all expenses related to maintenance and upkeep of common areas of the property, as well as the operating budget of the homeowners association itself. Monthly HOA fees can range from under $200 a month to over $1,000+ per month for luxury communities.
Please note all expense amounts listed above for utilities, taxes, insurance and HOA fees are rough estimates only, and actual expenses can vary from home to home and community to community. We will personally investigate and verify fou you any and all expenses in the community or particular home you are considering prior to making any purchase.
*What is it,
*who it goes to
*where it comes from
What is a down payment on a home?
The down payment is money you give to the home’s seller. The rest of the payment to the seller comes from your mortgage. Down payments are expressed as percentages. A down payment of at least 20% lets you avoid mortgage insurance. To explain how bankers and real estate agents talk about down payments, let’s say you buy a house for $100,000: A 3% down payment means that you pay the seller $3,000 and you borrow $97,000.
With a 20% down payment, you would pay the seller $20,000 and you would borrow $80,000. Sometimes you’ll hear a phrase like, “Alex put 20% down on the house.” That means that Alex made a 20% down payment. The money for a down payment can come from:
Your own savings.
The money you get when you sell a house.
Gifts and grants from family, employers and nonprofits.
Why down payments are required
When you make a down payment, you risk losing that money if you can’t make the house payments and end up in foreclosure. This gives you an incentive to make your mortgage payments. That’s why the lender requires a down payment.
Minimum down payments
Most mortgage lenders require a down payment of at least 3%. FHA loans (mortgages insured by the Federal Housing Administration) require a down payment of at least 3.5%. Depending on your credit history, the type of dwelling and your reason for buying, the minimum down payment could be 5%, 10%, 20% or more. A few limited mortgage programs require no down payment or a very small one.
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How can I buy real estate in the USA and any other country
If you are looking in the Los Angeles area, the best way to get started to brows our website and provide us with details of your choice home. Many of the properties on our website has price tag or you can provide us the details of the type of home or real estate you would like to purchase, along with your budget. Once we have all the details of your requirements, we can start a search for properties that match your criteria, and we can provide you with photos and information about the property.
we can answer any questions you have such as neighborhood information, maintenance costs, property taxes, security, and other expenses related to a particular home. Once you decide which area or country you would like and type of home. it is best to plan a trip to the US once your escrow agent is holding your funds and will not release them to the seller until the title is transferred to you, unless agreed to otherwise by yourself and the seller. As soon as the deposit of $10,000 is made to seller the property authormaticaly becomes your own.
Again as soon as you transfer $10.000 deposit to your escrow agent, It’s recommended to plan trip to the country you want to purchase the property to atleast spend about 5 to 10 days on your visit to tour the area and view properties. especially if you would like to purchase property while you are here. Your deposit with the escrow agent will gurranty your visa and will help facilitate your visa to the country you want to make the purchase.
Which countries and citizens do you work with in helping to buy real estate?
We work with clients from all over the world, and some of our past and present clients include citizens of western Europe, Canada, Russia, Asia, Africa and the Middle East among others. No matter what country or part of the world you are from, we happy to learn about your needs and assist you as a new client.
Do you work with investors as well as individuals in acquiring or selling US real estate?
If you plan to invest in US real estate or any other country we can help with acquiring the real estate, and in addition our firm also can work with you on leasing/renting property, screening tenants and listing and marketing property for sale. If you have any quesitons on this process or would like to get started on finding real estate in any country, please feel free to leave your contact information on our contact form and i’ll get back to you within 24 hours. Or you can call us directly at (310) 717-2232. Thank you for the opportunity to serve you!
Visas and Immigration after down payment to buy a house in United State and Europe
What types of visas are available for immigration and permanent citizenship to the United States?
Before making any purchase of real estate in the US, you should consult with an attorney in the US who can advise you on the different types of visas and immigration options, since owning real estate does not guarantee any type of visa or citizenship in the US. Though with us, you will have no visa problem as we have a good arrangement with Us govt and countries we have partners.
As far as some of the types of visas and available, the most common visa is a work visa, but an investor visa EB-5 is available to individuals who can qualify and invest in a business in the United States, the minimum which can range from $500,000 to $1,000,000. This visa can eventually lead to permanent citizenship if desired. Again, consult with a US immigration attorney who can advise you on your options.
For more information on the different types of visas and immigration in general, the US Department of State has en excellent website which explains the process in more detail. This can be found here:
Visas and Immigration
Down payment and mortgage insurance
When you make a down payment of less than 20%, you must buy mortgage insurance. There are 2 main types: Private mortgage insurance, often called PMI, is paid to an insurance company. Most PMI premiums are paid monthly. They’re called annual premiums, even though they’re paid every month. Most insurers offer the option of an “upfront premium” — a big payment at the beginning of the loan. FHA insurance is paid to the federal government. When you get an FHA-insured mortgage, you pay for an upfront premium plus monthly premium payments.
Fees for small down payments
In many cases, lenders charge fees to borrowers who make down payments of less than 20%. Those fees are on top of mortgage insurance premiums. The smaller the down payment, the higher the fees, which are paid at closing. Sometimes the lender charges a higher interest rate in lieu of the fees.
Bigger down payment = more house
Finley and Kerry each can afford to spend about $925 a month on a house payment, excluding taxes and homeowners insurance. Kerry has $15,000 more saved for a down payment and can afford to spend about $32,000 more for a house.