Downpayment for a house.

[Rhonda922]

Does anyone know what the "standard" is for a downpayment on a house? Is it 10%, 20%? DH and I are apartment living at the moment and I've really had it. I'm so tired of noisy and nosey neighbors. I'd just like to have our own home on our own piece of property and have some peace and quiet for a change. If you live in a nice quiet home, boy, I'm so jealous of you!

 

[Aidensmom]

You can get an FHA loan with 3% down. 10% is pretty common for a conventional loan.

 

[staci]

You can get houses with almost no money down, but of course then your house payment goes up. Also, you usually have to pay PMI (I think that is what they call it, extra insurance or something) when you dont have at least a certain percentage down. We put down 20% on our first one, and 30% on the second one, but after seeing home costs in some areas, I can imagine this is close to impossible for some people depending on where the house is.

Regardless of what you put down, owning a home is almost always the way to go IMHO. At least your money is going SOMEWHERE instead of just towards rent. Even if only a small percentage is going to the principal it is at least something.

 

[mrsv98]

Try and get 20%, then you won't need PMI (primary mortgage insurance). That can add a chunk to your monthly payment and once you have it, the banks are very reluctant to drop it evn if you can prove you have more than 20% equity.

 

[swea_pea1]

Go see a mortgage broker and work out the options. The one we used was wonderful and got us a loan at 1/4% higher with only 10% down where we did not have to pay PMI. In the end it worked out better for us since the interest is deductible and the PMI is not. My monthly payment with the higher rate ended up being lower than it would have been had I gotten the lower rate but paid the PMI.

 

[Ronda93]

Conventional wisdom has been 20%, but I agree, that's nearly impossible in some markets.

Regardless of your credit, if you put down less than 20% you will have to pay PMI (private mortgage insurance). If you default on the mortgage the lender still gets paid. This is not to protect you, it's only to benefit the lender. There's some good notes on PMI here.

Depending on the loan you may be able to drop the PMI when you demonstrate that the outstanding balance is below 80%. On other loans it stays on until the debt is retired (refinanced).

With good credit expect PMI to add $50/100,000 loan value per month.

Good luck.

 

[icebrat001]

PMI is not required for all loans that are under 20% for the down payment.

I suggest you speak to a loan broker, and they will figure out the best option for you.

We are planning to go house hunting VERY soon and we aren't putting 20% down and I broker told us we will have no PMI

 

[Rhonda922]

Wow, thanks. I'm really learning a lot. I have wanted to buy a house for so long but just keep putting it off wondering if we'll ever be able to do it. I know I'll be shedding some tears (tears of happiness that is) the day that we finally get a house!

 

[Ronda93]

Go see a mortgage broker and work out the options. The one we used was wonderful and got us a loan at 1/4% higher with only 10% down where we did not have to pay PMI. In the end it worked out better for us since the interest is deductible and the PMI is not. My monthly payment with the higher rate ended up being lower than it would have been had I gotten the lower rate but paid the PMI.

This is a great change. The lender gets a little higher rate, but the deduction makes it much less painful. The article link I posted before had a couple paying nearly $900 in PMI monthly. Huge loan with poor credit.

icebrat, are you looking in the Tampa area?

 

[Cindyluwho]

We have tons of mortgage info on our website
http://www.homeseattle.com just click on the "calculator" button and it will answer all your questions as well as helping you figure out what your loan pmt will be. Remember, after the tax deductions it may well be cheaper to buy than to rent. Good luck to you!

 

[Brendita]

3 years ago.
We did 2 loans 80% 20%.
Sellers paid part of the closing.
So we paid $1500.00 total.
Get a loan broker they will give you the best advise.
Good luck.

 

[icebrat001]

This is a great change. The lender gets a little higher rate, but the deduction makes it much less painful. The article link I posted before had a couple paying nearly $900 in PMI monthly. Huge loan with poor credit.

icebrat, are you looking in the Tampa area?

Yes either Riverview, or Lakeland.

 

[The Mystery Machine]

Try and get 20%, then you won't need PMI (primary mortgage insurance). That can add a chunk to your monthly payment and once you have it, the banks are very reluctant to drop it evn if you can prove you have more than 20% equity.

We have never had a problem rectifying in Missouri or Texas. We would buy then wait for the appraisal to go up, then we would refinace and get rid of the PMI.
We always use a morgage broker.

 

[4formickey]

icebrat 001 you guys are beautiful I know already but I had to tell you.

 

[icebrat001]

icebrat 001 you guys are beautiful I know already but I had to tell you.

Thank you.

 

[4formickey]

depending on the area that you are buying into, some lenders don't add pmi.

 

[CherCrazy]

You CAN buy a house with no money down AND have no PMI. I am a realtor and have buyers on this program all the time.

The loan is called an 80/20. The loan program basically gives you two loans on your home. The primary loan, the 80% is a fixed rate mortgage for a certain period of time, say 30 years. The second mortgage, the 20%, is a variable rate Home Equity Line of Credit loan (called a HELOC) which can be paid off at any time. Say you get bonuses each year, you could sock that amount away on the 20% loan and pay it off early. Then you would be left with only the 80% loan for the remainder of your mortgage term.

Some sellers will also help with closing costs, depending upon several factors including their future plans, the home's appraisal, etc. So it is possible for you to get into a house with no money down....you just need $$ for a good faith deposit on the home.

For all this, you need fairly good credit. If you have low credit scores you can pretty much forget it.

 

[JudicialTyranny]

Does anyone know what the "standard" is for a downpayment on a house? Is it 10%, 20%? DH and I are apartment living at the moment and I've really had it. I'm so tired of noisy and nosey neighbors. I'd just like to have our own home on our own piece of property and have some peace and quiet for a change. If you live in a nice quiet home, boy, I'm so jealous of you!

Buying a home is generally a good idea, but it is no guarantee that you still won't have noisy or nosey neighbors!



We thought we were getting away from that by moving into a somewhat rural area with 2+ acres of land, but we have a neighbor who complains about everyone "copying" off of her (landscaping, house decoration, etc.) and another who likes to rev the engine of his Mustang for no good reason (I guess the vibration gets him "excited").

I seriously think that unless you can buy 10 or 15 acres of land, there is no getting away from the nuts!

 

[CherCrazy]

Poor Judicial....don't know whether to laugh

or send you a group hug

 

[Rhonda922]

CherCrazy -

I see you're in New Jersey too. I'm in central. A few people at work who live in PA are always telling me to come over there to get away from the high taxes, insurance, etc. I'm right on the border with PA so it's something I've definitely considered. I like the program that you spoke about. I'm going to look into that.