Mortgage and Lending with D A Griffin Financial.LLC NMLS 6380



I get this a lot, as a loan originator a potential home buyer calls, especially a first time buyer and we discuss what is needed to buy a home. We cover the credit history, the job and income history, record two years of residence history, talk about debt to income ratio, then we get to the savings.


There are several loan programs that do not require a down payment, or one can use a grant program in some cases. So, having a down payment saved is not always necessary, but the question is "Don't you want a safety net?". When you own a home things break once in a while,  having no funds to make repairs can make home ownership not so appealing. Or if you have no savings trading a rent payment for the exact house payment may be less than ideal. 


You  may not NEED money to buy a home, but you are going to find it much more comfortable to have a little pad. The best thing to do is when you first think of buying a home, hook up with a loan originator and work through the basics. Then make a plan to save for a down payment or a rainy day. In some instances having some reserves may be the difference between an automated underwriting program accepting the file. 

Everyone wants home buyers to be successful home owners, having some savings is a big part of that. Having some skin in the game is a term we hear a lot these days. Back in the day buying a home was much harder, you had to save for a down payment,  have reserves and perfect credit. We've come a long way to make home ownership more widely available, which is a good thing, don't overlook the value of savings. 


Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Debbe Perry 04/09/2013 10:59 PM
  2. David & Lisa Webber 04/10/2013 12:20 AM
  3. Jose Gomes 04/10/2013 07:02 AM
  4. Winston Heverly 05/02/2013 11:23 AM
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Pat Rentz
VIP Inspection Services Inc - Cary, NC

I always hear - can you give my client a break, they don't have the money to pay for the home inspection.  I bite my tongue and give some options.  My thoughts are though - you can't afford my fee, you can't afford to buy a house.

Apr 10, 2013 01:31 AM #57
Bill Reddington
Re/max Southern Realty - Destin, FL
Destin Florida Real Estate

I happen to think it is better to equity when buying a home. But have sold to many Veterans with very limited closing costs

Apr 10, 2013 01:33 AM #58
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker
If you can lower your months payments by owning, not renting as a first time home buyer client of mine just did, that is a good reason to buy now while interest rates are still do low. What did they put down? 3.5% with closing costs paid by the seller. All their other expenses remain the same ie utilities.
Apr 10, 2013 02:11 AM #59
Marshall Brown
Mid America Inspection Services, LLC - Fargo, ND

Talk to different people and you'll get different answers but my understanding is that a typical home purchase will require about 3% in additional expenses the first year beyond all the obvious ones and that will stay at about 2% after the first year.

Not planning for these is planning to get blindsided when they pop up.

Apr 10, 2013 02:24 AM #60
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Dora, we agree. We see too many, especially first time buyers stretching themselves too thin.

Apr 10, 2013 02:25 AM #61
Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

I've worked with many buyers with small down payments who've done just fine. No question, you want money in the bank after you close since you'll often have more expenses than you anticipated.

Right now our market is so insanely competitive that it's almost always the cash buyer that gets his or her offer accepted - so for now the answer is  - you need a LOT of cash!


Apr 10, 2013 02:37 AM #62
Marvin Caplan
A La Carte Real Estate, Brokerage - Beamsville, ON
A La Carte Real Estate, Brokerage

Insured Mortgages in Canada are no longer available with 0 down.  I recall having a prospect tell me she wanted to buy a home with zero down and a 40 year mortgage.  I refused to try to find a property for her unless she saved the equivilant of a bit more than the Mortgage charges would be each month.  When she couldn't we agreed she should wait. Two years later she still has'n purchased but I have slept well.  With a first time buyer, I ask for a two hour interview before we start to look.

Apr 10, 2013 02:41 AM #63
Christi Farrington
William Raveis Real Estate - Wilton, CT - Westport, CT
~ Your representative in Fairfield County, CT

Counseling our clients along with a good mortgage lender is a definite must when working with first time home buyers, especially.  Nothing worse than being mortgage poor!

Apr 10, 2013 02:56 AM #64
Paddy Deighan JD PhD - Vail, CO
Paddy Deighan J.D. Ph.D

it seems that today, it is esier to get a sub-prime loan than it is to get conventional funding...I ahve seen this a lot and I fear that we are repeating the mistakes of the past!!

Apr 10, 2013 03:08 AM #65
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Well we know about VA and USDA 100% financing--but these are not common and other forms of loans with no money down are now scarcer then hen's teeth! I'd always be nervous about a client of mine trying to buy and then maintain a home with no money.

Apr 10, 2013 05:34 AM #66
Dora Griffin
D A Griffin Financial.LLC - Fort Thomas, KY
NMLS 6380

Marvin, that sounds like a success story. I had someone ask about a 40 year mortgage this week. I've not done one, maybe there is some situation where the borrower would benefit, but I've not had that fit as of yet.


Christi, house poor is NOT a good plan. I saw a program recently where they were discussing the fact we use gross income vs net to qualify borrowers. We have to look out for our buyers.


Paddy, let's hope not! I've not seen any sub prime loans, but for that matter I really never participated in that market.


Nina, I always caution buyers seeking 100% financing. Yes, VA is a good alternative. RHS can be as well, but getting grants does not always work out. 

Apr 10, 2013 06:28 AM #67
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

Dora - I think it's scary that we appear to be heading down the same road again. Do the bankers and people in Washington never look at history? Do they never think about cause and effect? Do they have any sense at all?

Apr 10, 2013 06:38 AM #68
Dora Griffin
D A Griffin Financial.LLC - Fort Thomas, KY
NMLS 6380

Marti, I can emphatically answer your question about their IQ,,, the answer is NO they don't. They are too busy keeping wall street happy to think about the consequences of their actions.

Apr 10, 2013 07:03 AM #69
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

Great Blog with really great information.  You need a cushion or the roof may fall in.  Lenders also look at your savings to assess the risk in the loan.

Apr 10, 2013 10:10 AM #70
Dana Basiliere
Rossi & Riina Real Estate - Williston, VT
Making deals "Happen"


I tell that to first time home buyers and have just included some of that in my FHB blog post here on the rain. You bring up a good point about "what if the xxxx breaks?"

Apr 10, 2013 11:26 AM #71
Dora Griffin
D A Griffin Financial.LLC - Fort Thomas, KY
NMLS 6380

You are right, Ric, lenders do look at savings among other things. FHA may say one can buy a home with a 580 credit score for instance, but not all lenders will do that. Often with lower scores come higher reserve requirements.

Dana they need to trust us to educate them about all aspects of home ownership. Being perpared for the XXX breaking is important! 

Thanks for your comments!

Apr 10, 2013 11:51 PM #72
Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

go VA and you need no money ... there are some other loans out there also with no need for money .... but you must have money to keep up the maintenance ... I do not like these no money down loans ...

Apr 12, 2013 03:49 AM #73
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH so many of the others who commented - it is harder to walk away when you have real money in the deal. One other point, "EQUITY" is staying power - I work in the vacation home business you "NEED" 20% down to buy...and after all the issues we saw in the last 6+ years - it's no surprise not many of my buyers walked from homes.

Apr 14, 2013 12:24 AM #74
Dora Griffin
D A Griffin Financial.LLC - Fort Thomas, KY
NMLS 6380

Steve, skin in the game should matter I think. With so much equity lost it seems it would just makes sense. Here's hoping we have better times ahead as to equity growth.

Apr 14, 2013 11:11 PM #75
Hi! #ajgoreigFARE
Aug 23, 2013 10:37 PM #84
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