How much down payment do you need?

[leahjade]

My son is considering buying his first home instead of renting. In my day you needed 20% down. Is that still the case?

 

[DLB]

All states are different, but here in CT - no you do not. We have CHFA (first time home buyer program) and they do not require a downpayment, but in some cases there is a min credit score to qualify.

Best thing to do is see a mortgage consultant. They could tell him best what his situation is..

 

[smitch425]

My son is considering buying his first home instead of renting. In my day you needed 20% down. Is that still the case?

In most cases, the 20% down is just the required amount to avoid having to pay PMI insurance with your house payment. You can usually put down far less than that. As PP said, check with someone in the area. His bank should have someone he can talk to.

 

[artemis4]

My son is considering buying his first home instead of renting. In my day you needed 20% down. Is that still the case?

My 2 cents, coming from my experience as a realtor:

He needs to go talk with a mortgage lender. The down payment amount will depend on multiple factors including the type of loan he obtains, debt to income ratio, purchase amount of the property, and his credit score. I would recommend starting with the mortgage department of his bank or any other strong local bank.

 

[Keeblerelf928]

I'm closing on my new townhouse end of April and we are only putting down 10%. If you do less than 20% you have to pay PMI. You can go for an FHA loan which only requires 3.5% down and that money can be gifted from a relative. Conventional loans require 5% down normally.

If he really wants to buy a house he should get a preapproval. My recommendation is to figure out how much he can comfortable afford monthly and work from there. Make sure to take in to account, Mortgage, Insurance, Taxes and Mortgage Insurance Costs as well as HOA if there is one when deciding an amount. We found that what the bank said we could afford and what we said we could afford were very different. The bank was willing to approve us up to 2600 a month payment (400k house at least) where as we feel as though we are stretching at 1600 with the place we bought.

Talk to the bank, but decide what you are more comfortable with as the final deciding point. After that make sure you find a good realtor who isn't going to show you houses out of your range because there is no point in falling in love with what you can't afford. Have fun!!!

 

[airsdaddy]

I'm sure it all depends on your situation. We closed on our house last July. By the time it was all said and done, they had paid me $50 to take it

I am prior military, and had my VA loan available. We offered asking price + $5000, but they paid $5000 in closing costs (asking price had been 118k and was reduced to 95k the week we decided to go for it...we were not the only ones who jumped at that price!). It was bank owned, and they were probably very happy to have it off the books.

We had to put $1000 in escrow, and at the end, they had sent us checks totalling $1050.

And now, my life is full of "let's paint xyz room"!

 

[JAMIESMITH]

I bought my home three years ago. Because the home I bought was foreclosed on before the builder finished it, I had to get a USDA Guaranteed Loan. I did not have to put any money down and was actually able to get $7000 to finish the home with. This is a thirty year fixed rate mortgage through Chase that had a very low interest rate. As other people have said, there are a lot of factors: credit history, the property being purchased, debt to income ratio, etc.

 

[mrsklamc]

Check with a credit union too. Ours does not do PMI, but may approve a purchase with less than 20% if credit is good.

 

[OnlyDisney]

Here's a website through hud.gov. http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH It can give you an idea of what he'd qualify for. Then he should speak with a mortgage lender to get pre-approved. And remember, just because the bank says you can afford "x"amount doesn't mean you need to spend that much.