From the WSJ Real Estate Archives

Tips for Buying
With Little Money Down

by Robert Irwin

Question: We want to buy a new home, but we have only $11,000 in savings. We have good credit, but I've been told that our savings may not be enough to cover a down payment and closing costs on houses that we like, which are selling for around $190,000. Properties are selling very quickly in our area and we want to buy before we are priced out of the market. Is there anywhere we can go to get a loan that will allow us to buy?

Sharon: It's a whole new ballgame out there today in terms of financing. If you have good credit and sufficient income, your savings should allow you to afford a $200,000 home, including down payment and closing costs.

A down payment of only 3% is commonplace today. You can get this type of financing in the form of a Federal Housing Administration loan or through a conforming conventional (non-government-guaranteed or insured) loan. However, be wary of using a wizard at one of the many online-broker web sites to qualify yourself; these calculators often don't ask for enough information to give you an accurate mortgage picture. Talk to a good mortgage broker who can pre-approve you so that you'll know your exact maximum mortgage amount. Get a recommendation from an agent, or use online pre-approval services from companies such as E-Loan.com Inc., Mortgage.com Inc. or HomeAdvisor Technologies Inc.

-- Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Renovating Your Home," (McGraw-Hill, 2000).

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