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View Full Version : What % downpayment did you make on your home?


disneysteve
04-15-2006, 07:48 PM
I was just reading an article on debt management. The author stated that he believes that if you can't put down 20%, you can't afford the house. So I was wondering, with the popularity of creative financing these days, how many of us put down 20% or more when buying our homes.

We bought our home in April 1994 and put down 20%.

How about everyone else?

crisi
04-15-2006, 07:53 PM
Not us. I think we were something around 10%.

Eight years later its paid off.

mantaz
04-15-2006, 08:11 PM
Due to DH being in the army, we put zero down. VA loan does not require a down payment. 5 years later the house is paid for completely. So I don't agree with the author. It truely depends on what size house, where you buy it and how you work your finances if you can afford a house with or without a downpayment.

Angela

Julia M
04-15-2006, 08:29 PM
We put 20% down in 1992.

I also don't agree with the author's philosophy. I think it also depends on where you live.

There is no way we would have come up with the downpayment (60K) if dh hadn't bought a house young (at 23) and it appreciated.

If someone had postponed buying a house a couple of years (in our area) until they had a bigger downpayment, they might find the cost of the house went up alot (like 100K)

Like anything else, generalizations can be faulty.

Julia

disneysteve
04-15-2006, 08:38 PM
I never said I agreed with the author, even though we did put down 20%. But 10-15 years ago, that was pretty standard. I think the point he was probably trying to make was that lots of people are buying houses they can't afford by using minimal downpayments, interest-only mortgages, etc. That I would tend to agree with.

PaulaSue
04-15-2006, 08:38 PM
9 years ago we put 5% down.

MickeyMickey
04-15-2006, 08:40 PM
2002 - 30%

kritter
04-15-2006, 08:42 PM
1999-20% well a bit more than that,,,,

Franne
04-15-2006, 08:42 PM
7 years ago we put down 10% on a 30 year loan. But now we have a 15 year loan...only 11 years to go and it's going down quickly! I do wish we could have put down more, but we just didn't have it at the time.

DVC Sadie
04-15-2006, 08:44 PM
I assumed a loan for my 1st house in 1983 then we put 20% down on our new house in 1987.

lilprincessnbuzz
04-15-2006, 08:44 PM
1994 - 30% down

petrymom
04-15-2006, 08:46 PM
first home - 1993 nothing down FHA loan

second home (built in 1999) - profits from sale of first home and little bit saved = 25% down originally had 30 year mortgage and now have 15 year mortgage (should be paid off in 7 years.)

pearlieq
04-15-2006, 08:53 PM
1st home (2002) 5% down

2nd home (2004) 10% down to start, bought down to 20% at refi 1 year later.

I don't know a single soul who put 20% down on their house, for what it's worth.

bigbabyblues
04-15-2006, 08:56 PM
We put down $10,000 on a roughly $70,000 house, I can't quite do the math in my head, but it's a little more than 10%.

We have never had any problem affording our mortgage, and it will be paid off in 11 more years at the rate we're going (20 years total). I do agree with DisneySteve that some people use the no-downpayment loans to buy more house than they can afford. We've seen a couple of our friends do that and end up filing bankruptcy and/or losing their house altogether.

ChrisnSteph
04-15-2006, 08:59 PM
We put 20% on this house - almost 100K. It will be paid off in approximately 29 years, lol! The only way we could do 20% was because we had a lot of equity in our last house. I can't imagine how first time buyers can save up 20% down for a house these days. I guess it really depends on the market.

Katie
04-15-2006, 09:00 PM
In 1994, we put 32,000 down on 132,000 house.

In 2006, we put 100,000 down on 229,000 house.

I guess that makes a minority, but my husband hates to be in debt.

blanq
04-15-2006, 09:01 PM
We purchased our home in 1991, with a VA loan and $0 down. The money we did have saved at the time of our purchase was used to purchase all new appliances and for some needed remodeling. I guess that for us, I would have to say I disagree with the author's statement that if you can't put down 20% you can't afford the home. It was cheaper for us to pay our monthly mortgage payment in 1991 than what we had been putting out for rent, when we took into consideration the income tax savings. Now our home is worth more than 3x what we paid for it and our income has also tripled during that same period. We have no plans to move up, into a bigger and more expensive home so our housing costs now are a fairly small portion of our income.

disneysteve
04-15-2006, 09:04 PM
We have no plans to move up, into a bigger and more expensive home so our housing costs now are a fairly small portion of our income.
I think this is a great point. If you buy your home knowing that your income is due to rise significantly, stretching a bit to make the purchase can make sense. Even though we put down 20%, we also did it when I had been in practice for less than one year. I knew for sure that my income would double within 2-3 years, and it did, which made our mortgage payments a much smaller % of income than it was initially. Plus, we've refinanced twice along the way and lowered our payment even more.

Plantlady
04-15-2006, 09:13 PM
1 year ago, we bought our first home, with zero percent down, we got the sellers to pay the closing costs. Very little out of our pocket. Our mortgage is lower than rent was in our previous house.

daddyof2
04-15-2006, 09:21 PM
oct. 24th 2005 about 18%

cgcruz
04-15-2006, 09:34 PM
I dont know how people living in this area can affford to put down 20%. Houses here now average $300,000-$400,000 for a regular 2 floor home. Heck , i've seen condos going for $600,000. Who are dumb enough to drop that kinda cash, who knows? If I ever plan on buying my own place, I will have to move out of this area....hmmm... Central Florida sounds nice! :goodvibes

wide awake
04-15-2006, 09:34 PM
VA no-no loan...in other words no down, no closing. And yes, our ratios were fine...now that the house has tripled in value and our income has also tripled...I was very careful when I bought this house, picked a good floor plan in a great neighborhood, wonderful school district...bought new so no repairs, carpet replacement, etc...We could move up, but we're waiting to do that till we cash out and move to a cheaper area of the country. Then I'll have around 3000 sq feet, an acre lot, gourmet kitchen...DH will be retired, and we'll only be 45.

marcyinPA
04-15-2006, 09:43 PM
We bought our home in 1999, and scraped together 5%. Unfortunately, we had just gone through a job lay-off, and my DH had just gotten a new job. We also owned another home, which we couldn't sell, but rented out because we had moved to another state (for the job that he was laid off from...that was a disaster...we had only moved a year before he was laid off, so we moved back home to PA. I was pregnant with our second child, and our original house was rented. Our tenants entered an agreement of sale with us, and everything was good to go. We entered an agreement of sale on our current home, and then our tenants backed out of the deal. UGH. Quickly put the house back on the market, settled on our current house, and carried two loans for a few months. It was a MESS.

I am SO glad that we went through with purchasing our current home. We have equity out the ying-yang now, and our mortgage payment is about $800. We can most definitely afford this house and wouldn't be able to afford any other at this point!

Cheshire Figment
04-15-2006, 09:57 PM
Mine was strange. Had brand new construction in a new development. Due to various reasons start was delayed, as well as construction delays due to hurricanes.

Base price of the house when we signed the purchase contract was $199,000. We had $38,000 in customizations and upgrades bringing it to $237,000. However, in the 15 months between contact signing and closing the base price of that model went up by $55,000, so when I went to closing the value was $292,000.

We had to put down $5,000 when we signed the contract and another $15,000 was due two months later. We paid $3,000 as a redraw fee, and when all the customizations and upgrades were figured out we had to come up with another $19,000 (which was half of the upgrades and customizations), for a total $42,000 before any construction started.

When I went to closing I came up with another $100,000 so my down payment was effectively $142,000. But then the mortgage only started at $102,000 and after a little more than a year is down to about $96,500.

Actually the bank (BofA) also offerred me a $110,000 HELOC but I said keep it to the IRS deductibility maximum of $100,000 and so I have the unused line and only $96,500 mortgage balance on a home currently valued at about $350,000.

kydisneyfans
04-15-2006, 10:13 PM
3% here in 2004-mainly due to a job move and our old home not being sold yet. We did an interest only to get in and refinanced when our old home sold. I would rather use the money to pay down depreciating or non secure debt first-plus I get the interest deduction on federal taxes.

staceyfe
04-15-2006, 10:25 PM
On our 1st house in '93, we put down 3% on an FHA loan. I thank God that was available to us as it would have taken us years to save for 20%. Those years would have been wasted in rent, foregoing the equity. On the house we're presently in, it ended up being about 18% down. As soon as we hit the 20% equity, we got that PMI off the loan. PMI is like watching cash flush down the toilet! Now we're set to have the house paid for in 8 years, 8 months :goodvibes

babiesX2
04-15-2006, 10:37 PM
Our 1st house Dh bought before we were married. He qualified for a VA loan and had no down payment. Long story, but we put lots of sweat equity into the house by removing 60's wallpaper, painting the cabinets, tiling the floors, repainted every room, installed a shower in the front bathroom that only had a tub, and too much list. Our hard work paid off because we sold it in Oct/05 for a nice hefty profit. Naturally, we rolled the profit on the old house into our new house purchase. I'm fairly certain that we had more than 20% to put down. Our down payment was large enough that we got out of "PMI." :banana:

MrsPete
04-15-2006, 10:48 PM
I was just reading an article on debt management. The author stated that he believes that if you can't put down 20%, you can't afford the house. So I was wondering, with the popularity of creative financing these days, how many of us put down 20% or more when buying our homes.

We bought our home in April 1994 and put down 20%.

How about everyone else?We bought our first house in 1990 (same week we were married), and we put down something like 8%. I'm not certain that's true because it's been quite some time ago, and because my then-fiance bought the house on his own.

We moved to a larger house, nearer to work in 2002 and didn't need a mortgage. We plan to stay here until the girls are out of high school, then we'll move to a townhouse. Our house is ideally located, and I expect we'll sell for a good profit; I'll be happy if we can "break even" when we move again.

tinan
04-15-2006, 10:51 PM
When we bought almost 6 years ago, I think we were right around 10% down. We got a 15 year mortgage so only 9 more years to go! :banana: DH keeps saying that he would like to move to a larger house, but financially it does not make sense right now. As we grow older he talks about getting an RV and travelling some. With that in mind, I keep telling him we should just stay here so we can do all we want. In 9 years we'll be 45 and both girls should be off to college.

We were approved for a much larger mortgage than we took and I have to agree with the OP about people getting a larger mortgage than they can afford. Although on the other hand, I don't believe that if you can't afford a 20% downpayment that you can afford the house. My brother just bought my uncle's house with my mom's and my coaxing with 0% down and he will be able to afford the house. He was looking at another house at more than double the price of my uncle's, approved for and would have lost because there was no way he would have been able to afford it.

IDoDis
04-15-2006, 10:57 PM
1st house: 10% (1990 - prices were a lot less so 10% was also less)
2nd house: 40% (1999 - equity from 1st house)

Paging Tom Morrow
04-15-2006, 11:06 PM
Whoever thinks you should have 20% to put down on a house is an idiot. Sorry to be harsh, but it all depends on the market you are buying into.

In 2003, we put 8% down on a house that went for $320,000. Yes, we were forced to make PMI payments of $120 per month for two years ($2,880 total). In that same time the value of our house appreciated over $100,000 and mortgage rates rose over 1 full point.

If we had saved the $30,000 over the first two years that we paid for our mortgage, taxes and PMI and then were able to purchase the exact same house, the 1% rise in interest rates would have resulted in the same monthly payment. However, that house went up $100k during that time frame, so we would not have been able to afford it!

Tink&SquirtsMom
04-16-2006, 12:26 AM
We did zero down. Used two mortgages, one for 80% paying interest only, one for 20% paying interest (high rate) and principle (no PMI with an 80-20). That was the only way we could squeeze into a mortgage in NorCalifornia. Two years later, and our income has barely changed, but we are able to use the equity to refi into one standard mortgage, 30 year fixed with over 20% down and can easily afford our home and qualify for much more (although we never plan on moving from our first home). We are on track to have our house paid off by the time I am 40 (12 years from now). It was risky to buy that way and I certainly wouldn't recommend it to most (especially with the market cooling now) but at the time home prices were rising faster then we could save (we would have been priced out of our home only 3 months after we bought it, it rose so fast), so this really was the best thing we could have done.

IMISSDISNEY
04-16-2006, 12:54 AM
We bought in 1999 and put 20% down.

ClarabelleCowFan
04-16-2006, 01:17 AM
We bought our house at a foreclosure auction and put 43% down in cash then took advantage of the low interest rates 6 months after we bought it and knocked our mortgage down from 30 years to 20 years with just a small increase in our monthly payment. :thumbsup2

I do wish that our property taxes were factored into our payment though. Just got the bill for $2000 for our taxes on the house this year. Ouch!

branv
04-16-2006, 01:22 AM
Just 3% here, but we can pay our mortgage, all bills in full, invest some and still indulge a little with just one average-level salary (I'm back in school for one year, DH works) so we feel pretty confident about our ability to afford this mortgage. When I go back to work, it's all free to apply to anything else: the plan is 1) 30-50% into savings, 2) at least 2 extra mortgage payments a year and then whatever else we choose. Either way, can you believe our mortgage, including insurance and property taxes, cost us less then our last apartment did? Crazy! We were just very careful to buy a house that wouldn't stretch us.

We were also one of the first to build in this subdivision. A year and a half later and they're now selling this model for $25K more then we paid. So, it's a pretty good thing we didn't wait :thumbsup2 . Houses aren't moving up insanely rapidly like in other states, but they are going up in our area. Happily, TX isn't one of those bubble real estate areas, and we're in one of the fastest growing counties. Very happy with our decision :)

comicguy
04-16-2006, 06:55 AM
We put 0% down because if was finaniced through NYS's SONYMA program. Basicaly they paid all closing cost(If I keep the house less then 10 years I have to pay back closing costs) and guarentee the loan.

hmgolden
04-16-2006, 08:53 AM
We bought our condo last May and put down about 7%. We took a second mortgage to cover the rest of the 13% and to avoid paying PMI. If we had waited until we had the 20% downpayment, we would have ended up priced out of the condo and the market as a whole since we entered in at the bottom of the market. Our two mortgages are less than what we were paying in rent.

djm99
04-16-2006, 09:09 AM
We put 3% down in 2000. It was our first home. We are currently looking for #2. It looks like this time, we will put 5% down.

crisi
04-16-2006, 09:11 AM
I think this is a great point. If you buy your home knowing that your income is due to rise significantly, stretching a bit to make the purchase can make sense. Even though we put down 20%, we also did it when I had been in practice for less than one year. I knew for sure that my income would double within 2-3 years, and it did, which made our mortgage payments a much smaller % of income than it was initially. Plus, we've refinanced twice along the way and lowered our payment even more.

Unfortunately, the reverse is true as well. People often buy houses with two incomes and no children, then have children and either income or their budget takes a hit. There is a need to look at the next few years and project out.

Chris
04-16-2006, 09:12 AM
1996, 25% down.

ducklite
04-16-2006, 09:21 AM
The first one was 5%. The second was 16%, and we took a 4% 2nd mortgage to avoid PMI. We were planning on putting more down at closing so it would be 20%, but ended up putting a lot more upgrades in after the fact, so that went "poof!"

Property values have skyrocketed here since we bought the place, and we've now got over 50% equity now. :thumbsup2

Anne

kinntj
04-16-2006, 09:25 AM
1st home- 10%
2nd home in California-10%
3rd home (now in)-20% 1/2 the price of the house in California.

dcfromva
04-16-2006, 10:17 AM
We put down 5% 20 years ago. (My first home, DH's second home). We held back some of our savings so we could make some improvements on our home.

Barring any more major "speedbumps" along the way (which might prevent us making extra principle payments), we should have the house paid off Dec 2007. (From this point, it would save us about 1,300 in mortgage interest.) Otherwise, it will be paid off by Dec 2009 using the regular payment schedule.

After all these years of making payments, I can't wait! :teeth:

-DC :earsboy:

CarolA
04-16-2006, 10:32 AM
First house, 10%
Second house 25%
Third Condo; 21%

I have no plans to stay here forever and have no real motivation to pay this thing off early LOL! If it appreciates I will roll the cash into a home in a few years. If not, I will buy again and rent it which is why all the proceeds from house two were not invested in Condo three!

sandy6879
04-16-2006, 10:34 AM
We put 3% down - we were renting and couldn't afford to save a huge downpayment.

Not even 3 years later, the house was just appraised for almost $100k more than what we bought it for. We refinanced to get rid of PMI and currently have 43% equity. Not too shabby.....

HaleyB
04-16-2006, 10:53 AM
I wish we had put more down because we bought in 99 and the market crash hit us really hard. But we put about 25% down on the house.

fac
04-16-2006, 11:45 AM
around 6% in 1991.
20% in 2001 <- this was required by the bank

raammartin
04-16-2006, 12:28 PM
15% down on our first home (we built) and it wasn't easy saving up for it, but we wouldn't have done it any other way.

Doodlebug939
04-16-2006, 01:11 PM
This is a really great thread. My husband and I are looking at moving because of the military in Dec or April to hopefully our last duty station. We are hopeful to buy a house and set down some roots. We are going to use VA I would guess. But I would like to have at least 5%-10% down. I think that the biggest thing it to find a house in your own price range that you are comfortable with. I know what my good limit will be based on our income and it is a lot lower then what I know they will approve us for. But I want a safe home in a good neighborhood like most people but I would rather be able to have a home and a life because I know that stuff happens. My brother has a wonderful house over his limit. And I see the stress that he has and being house poor.

Just my thoughts but thanks everyone for sharing.

SetzKitten
04-16-2006, 02:55 PM
My first house I put 20% down, second 50%, this one I have no mortgage.

PattiPB
04-16-2006, 03:20 PM
1992 (NJ) 10%
1996 (NV) 10%
2001 (NV) 30%

This house has more than doubled in value, so our equity percentage is unbelievable. But, it's all on paper---we have no intention of selling in the next ten years, so this incredible appreciation rate will probably rise and fall many times before we actually consider selling.

Some of the things that happen in real estate astound me! I can't imagine paying $3-4,000 per month in mortage. I also can't imagine taking HELs up to 100% of the PERCEIVED resale value of your home. We have people in our neighborhood who have refinanced 7 times in the same 5 years since we built this house! They'll never make a penny on their house---but the boat, jetskis, ATVs and trailer in their garage are sure pretty. Too bad they can't afford to actually USE THEM! :confused3

ptrbryant
04-16-2006, 03:41 PM
But, it was on a $130,000 house. We don't have a high household income since I homeschool and DH has a very middle-income salary, but I had money from an inheritance that enabled us to buy the house we'll probably stay in for many years with much lower mortgage payments than we would have had.

Karla B. ::yes::

Mickeyluver37
04-16-2006, 04:25 PM
Whoever thinks you should have 20% to put down on a house is an idiot. Sorry to be harsh, but it all depends on the market you are buying into.

In 2003, we put 8% down on a house that went for $320,000. Yes, we were forced to make PMI payments of $120 per month for two years ($2,880 total). In that same time the value of our house appreciated over $100,000 and mortgage rates rose over 1 full point.

If we had saved the $30,000 over the first two years that we paid for our mortgage, taxes and PMI and then were able to purchase the exact same house, the 1% rise in interest rates would have resulted in the same monthly payment. However, that house went up $100k during that time frame, so we would not have been able to afford it!

I have to agree here. We certainly would have been priced out of our neighborhood if we waited. We also bought in 2003, but luckily were able to get a VA loan. With only one income (enlisted) and two kids, we were lucky we were able to come up with the $5K-$6K closing costs, let alone a down payment. 2003 was still fairly early in the "bubble", but it was nearly impossible to find anything in our price range that didn't already have several offers, so there was no way sellers would be willing to pay closing costs. There is no PMI on VA loans, but there is a funding fee, and ours was around $3,500, which we rolled up into the loan.

paladin
04-16-2006, 04:46 PM
We bought our condo in 2003 with 5pc down (so we had to pay PMI), then we refinanced 8 months later when the parking spaces went on sale. By then, it had appreciated enough that we no longer needed to pay PMI.

If we had needed to wait until we had 20% down, we would still be waiting (and probably always would be)

Jen_in_NH
04-16-2006, 05:08 PM
We bought our house last year, with 10% down. Yes, we have PMI on our mortgage, but by paying extra on our mortgage every month, and being re-assessed for taxes after we did a TON of renovations, it will be gone this fall. So I don't think it hurt us any. Given how fast the interest rates are climbing here, and how fast the property values in the area are climbing, I think we made out just fine.

Jen

sk!mom
04-16-2006, 05:09 PM
I was just reading an article on debt management. The author stated that he believes that if you can't put down 20%, you can't afford the house. So I was wondering, with the popularity of creative financing these days, how many of us put down 20% or more when buying our homes.

We bought our home in April 1994 and put down 20%.

How about everyone else?

I think that the truth of the author's statement really depends on many factors. If you are stretching to get into a house and therefore put less down then you are headed for trouble. On the other hand if you know that your salary will soon increase you may be fine.

For instance, we put 5% in 1996. We bought a home in a great location with good schools that we knew we would be happy with forever unless we decide to leave town or downsize in retirement. The house needed work though and we put less down so that we had cash for the work. We expect to have it paid off in 2008. We bought based on only DH's income even though I planned to return to work in the next year. I did return to work and we have the house nearly paid off.

SWVA BGSU Fan
04-16-2006, 09:14 PM
We paid 3% down in 1993. For the first 3 years we paid extra principal and refinanced (shortened term) and were able to drop the PMI. We also refinanced again in 2003 and shortened the term once again.

I work in banking and find that most people don't pay more than 10% on homes they purchase. Heck, the conforming loan market is so competitive that PMI isn't required on some loans over 80% LTV if the applicants have a very good credit score.

hiwaygal
04-16-2006, 09:35 PM
I bought my first house just about 10 years ago. I still live in it...and I paid roughly $30 down payment.

It was a HUD home (foreclosure) and I was renting. My house payment (even with an ARM) was lower than my rent. Since I was a first time homebuyer, I only had to come up with $1000 earnest. My realtor was wonderful and managed to get all kind of incentives for me, and when I closed, I got just over $960 back.

Now, DH and I would like to start saving for another home. We have lots of equity in our current home (thank goodness) and that equity would probably be a good chunk of 20% down.

While I don't think 20% is NECESSARY (especially if you need the tax break, like I did), I certainly would like to have that next time! :)

Edna E. Mode
04-16-2006, 09:37 PM
In 1994 we bought a new house for $146,000 with 0 down. We sold that house in 2001 for $275,00 and bought another new house for $405,000. Our house in now worth $800,000. I can't imagine having to save up a down payment for either one of our houses. I know we got really lucky and are so grateful for everything we have. We feel that owning a home is the smartest thing you can do for your financial future. I don't really see a down side unless you have to move around a lot.

femail
04-16-2006, 11:23 PM
so really, the 20% is just for foregoing the pmi... that extra insurance that they sock you with if you don't have 20% of the current homes' value already as equity; however, i would think that it wouldn't hurt to ask a realtor if in the state you live in, if you are buying a house for less than appraised value, if that will go towards your 20%... if you need it like that, make sure that the appraiser is aware of what you are needing his appraisal for; you usually pay for it or at least half of it; it's part of your closing costs and besides a great inspector, one of the most valuable things on your side..(just make sure it's after your inital contract is signed.. you wouldn't want the sellers to start feeling like they sold themselves short... )

if you do a lot of work on the home within a year you can usually get a second appraisal and dump the pmi... without an entire title search again... but i have a feeling that a lot of areas are going to go "soft"
great deals everywhere... too much "high end" housing...(we used to drive in the really great neighborhoods when i was younger and guess how many apartments a house would split into..)

palmtreegirl
04-17-2006, 01:05 AM
1st house in NJ we put 10% down.

2nd house we built in PA and put 20% down.

Now after moving to Florida we're just renting, thinking about buying again but we have some reservations.

EthansMom
04-17-2006, 07:37 AM
DH and I purchased our first house 7 years ago. We paid 5% down and had to increase the selling price of the house and have the sellers give us money back at closing to help finance our closing costs. However, we were well-able to pay the mortgage, PMI, and taxes on the 30 year fixed-rate loan. We saved up cash for all of the improvements we made to the house. That house was in MD, within commuting distance of D.C. and Virginia. We sold it two and half years later for a profit of 20%.

We rolled all of our profit from house #1 into house #2 when we moved across country to Utah. House #2 cost almost $100,000 more than house number two, but with lower interest rates and putting 20% down (no PMI), our payments on the 30 year mortgage and taxes cost us pretty much the same as we had been paying on house #2. Once again, we paid for any improvements with cash. We sold that house after two and a half years for 1% less than we had invested in it (in a market that had gone down 5% while every other market went up).

We rolled all of our equity from house #2 into house #3. By this time, including the profit we made on house #1 due to rising house values, sweat equity on both houses, and cash we'd paid on improvements (including paying $20,000 to have a daylight basement finished in house number two, increasing the house size by two more bedrooms and a bathroom), we had over $80,000 after the sale of house #2.

So, house #3 was back on the East Coast in CT, and due to the proximity to NYC, cost $100,000 more than house #2. Interest rates were super-low at this point and we were starting to think that since we moved so often a 30 year fixed rate might not be the best way to go. We managed to swing a 7/1 ARM with an interest rate of 4.5%. Our mortgage payment is almost the exact amount that we were paying for our mortgage, insurance, PMI, and taxes on our first house. Our insurance and taxes add another $400 each month.

Our housing costs run about 40% of our monthly expenses, which is higher than recommended by the Oprah Debt Diet folks, but, since we've been paying down debt while we've been doing all of this moving around, we can afford to spend the extra on housing to live in a better town (safe, good schools).

We still have the 4.5% interest rate on the house for the next 5 years and the payments aren't hurting us at all. But it also doesn't make too much sense to pay a lot extra toward the principal since it would only save us a little over 3% (4.5% minus the 25% tax rate). So, when I have extra money, I put in taxable mutual funds. I figure I could always take that money out in five years to pay toward the mortgage if it reamortizes to a higher interest rate or if we refinance. If we're still here in 5 years, I'd like to have a hefty amount of cash to put into refinancing for lower payments on a 15 year fixed-rate mortgage.

No, we didn't put 20% down on our first house, but we made several decisions that have helped us to do well with housing. We bought houses we could afford with conventional mortgages. We paid in cash for home improvements, landscaping, furniture, and home decorating items -- if we couldn't pay for it, we didn't buy it. We never used our house as a piggybank. We rolled all of our equity into each successive house instead of spending it.

Lisa loves Pooh
04-17-2006, 07:51 AM
We did FHA at the time of purchase. (I think maybe a 5% dp, not sure).

The appreciation of our home (triple purchase price) in the 5 years we owned it--more than made up for the lack of a 20% downpayment. Market has finally leveled a bit--but we are holding steady at triple (most homes are actually trying to sell for more).

Had we waited--we would have not been able to afford the home in our desired location.

Kay1
04-17-2006, 07:56 AM
We tried to pay 20% in 1997 but the bank sent a check for the wrong amount to closing. As I recall, it was about 18%. Since we were getting the loan through the bank, the lawyers and bankers decided it would be easier to leave things as they were and to just waive any PMI. We pay less than 25% of our take home on our mortgage and can't complain.

Kramer
04-17-2006, 08:28 AM
We live in Central NJ...

In 1998 we put 20% down on a condo. We just bought a house in Sept. of 2005 and put 38% down.

crisi
04-17-2006, 08:40 AM
But, it was on a $130,000 house. We don't have a high household income since I homeschool and DH has a very middle-income salary, but I had money from an inheritance that enabled us to buy the house we'll probably stay in for many years with much lower mortgage payments than we would have had.

Karla B. ::yes::

That's another great point. It sounds like you guys did well, but the same circumstances (money from an inheritance) enabled my brother in law to put 20% down on a house he then had problems making the payments on. Because he could put so much down, the banks were willing to loan him money they wouldn't have loaned him otherwise. Had this been his only poor financial decision, he still would have been in deep water, but then they took out all the equity to redo the kitchen, and his ex-wife was a spender.

cindercopper
04-17-2006, 10:45 AM
In 1990 on our first townhouse we put 10% down and the builder put 10% down to avoid PMI. I was in sales at the time as easily paid the 10% back in the first 3 years with bonuses.

Second house was 15% down in 1997 and re-fied once to lock in a lower rate (5% fixed) and remove PMI. We plan to stay here at least 10-15 years.

Clancycat
04-17-2006, 10:53 AM
5.5 yrs ago, we put about 45% down on this house, thanks to equity from the sale of our previous house.

gottaluvdis
04-17-2006, 11:21 AM
10% down in 1992 for a $135,000 newly constructed home. We're still in our home and it's now worth at least $325,000 (we added a 20 x 22 family room). We dropped PMI as soon as we were able. We'll be refinancing soon and dropping 1 year off our mortgage (down to 15 from 16).

Chicago526
04-17-2006, 11:29 AM
The author stated that he believes that if you can't put down 20%, you can't afford the house.

:lmao: :lmao: :lmao: :lmao: :lmao:

Yeah, that sounds like it was writen by someone that makes $200,000 a year! :rolleyes:

For a $250,000 home, that's $50,000 cash down, plus closing costs. I don't know too many people that can save that kind of money in a reasonable amount of time (say, 5 years or less). Unless they are living at home or something.

I bought my condo for 3% down. I made enough money on that to put 20% down (barely, it came down to the penny!) on our single family home when we bought last August. If it wasn't for the condo that acording to this guy "I couldn't afford" DH and I would have never been able to buy a home!

Now, you should put down as much as you can, of course, and also be sure that you can afford whatever mortgage you wind up getting. But I don't think if you can't get 20% saved up, that you can't afford a house.

Kimberly815
04-17-2006, 12:23 PM
Don't own a house yet, but for us to put 20% down on the average house price around here (around $300,000 easy) would mean $60,000- You can bet we will never come up with that kind of a down payment!

georgina
04-17-2006, 01:40 PM
We bought our house in 1987 for $60,000. We put 25% down and had a 15 year mortgage at 9% interest, later refinanced to 7%. Our monthly payments were less than $500. We planned it that way to be able to pay it on one income. Housing prices have gone up a lot since then, but there are areas of Pittsburgh that are still quite reasonably priced.

emilymad
04-17-2006, 01:48 PM
Three years ago we put 10% down. We were both living with our parents so we could save the money. I am getting divorced so I am being bought out of my portion of the house. I will get about 13% of what it is worth today. I am in an apartment now because there is no way I could afford a house. I am going to try and save as much as I can but I doubt I will be able to put more then 5% in the next few years if I am lucky. In this area $300,000 wont get you much more then a townhouse.

bartleby1
04-17-2006, 01:52 PM
We put 20% down on our first house in 1998 but that was before the market went crazy. That house only cost us $165,000 so 20% wasn't too bad.

I don't see how first time home buyers are doing it in today's market though. The people who bought our house not even two years ago put down 10% and mortgaged over $300,000. YIKES! Housing has gone crazy in NJ. I seriously don't know how people are buying their first homes now. We thought the market was maxed out 1-1/2 year ago when we bought our current house but my house is currently selling for $80,000 - $90,000 more than we paid (We're in a development with 5 different style homes so they are easy to compare). I can't imagine having to come up with 20% with the crazy prices that are out there now.

golden1
04-17-2006, 01:57 PM
We bought our house in 1999 for $227K with a 10% down payment. We paid $87/month in PMI for 2 years. We appraised our house at that point and it was worth $369K so we eliminated the PMI. We refinanced a year later and actually added the 10% back onto our mortgage (needed for critical home repairs) but since we lowered the interest rate, the payments are the same. So even though we haven't paid much into the house, our equity at this point is almost 50% due to the skyrocketing home prices in MA. If I hadn't purchased when I did I could NEVER afford my house now. We are living on one income for the next few years and this house is affordable enough. Once I go back to work, I'll be able to put in more towards the principle and pay the house off faster.

In Luv with Disney
04-17-2006, 05:21 PM
We bought our house in October 2001 for $330K and put down $100K, plus we paid our closing costs in cash. Now, our house was just appraised for $540K!!! Insane how home values can go up, right???? (we have 12 years left of our existing mortgage and HOPE to have it paid off in about 7...we want to own outright by the time we are 40! :sunny: )

malibuconlee
04-17-2006, 05:41 PM
The first house we pretty much just had closing costs and did a VA loan for 100%. DH was 5 years out of college, and we didn't have a lot of savings, but we also didn't have much debt, we paid off his student loans in about 4 years.

The second house we had 20% down. The only reason we had that much was because of a work situation where they paid us subsistance that covered our rent for a year and a half.

We're back to renting and on subsistance again. Hopefully when we have our next house we'll be able to put much more down. It'll just depend on how much housing costs in the area we end up in.

barbeml
04-17-2006, 09:08 PM
Bought my townhome 12 years ago, put down 22%.

JKJK
04-17-2006, 11:21 PM
We put down 10%, when we bought back in 2000. 12 years to go till its paid off. :)

RoyalCanadian
04-18-2006, 08:25 PM
1999: 14%
2005: 76%

mickman1962
04-19-2006, 06:19 AM
I was lucky enough to put 100% down.

Mermaid02
04-19-2006, 09:20 AM
We put down 1/3 of the price of our home in 1997. It will be paid off in 6 years.

ceecee
04-19-2006, 09:23 AM
I think we put down just over 10% and paid off the mortgage in 15 years.

mallcat
04-19-2006, 09:26 AM
We paid cash for our lot. Then, when we built the house, we had enough equity already that we didn't need to pay a down payment. No PMI either. All we had to borrow for was the price of constructing the house.