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newbie00
LIF Adult
Member since 3/11 1191 total posts
Name:
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House Savings
We put down 5% and were able to get a conventional mortgage. We wanted to make sure we had enough money in savings in the event of any emergencies. The cost of us renting vs. what we pay for our home (including utilities) isn't that huge of a difference.
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Posted 6/4/15 6:22 PM  |
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itsbabytime
LIF Adult
Member since 11/05 9644 total posts
Name:
Me
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Re: House Savings
We were married for a long time before we bought our house. We banked my entire salary and lived off of DH's. When we finally bought our first house we had a lot of $$$$ saved. Significantly more than what you posted.
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| Posted 6/4/15 7:34 PM |
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BeachGrl
LIF Adult
Member since 10/11 2140 total posts
Name:
Kristy
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House Savings
Can anyone explain what the pros/cons are to conventional vs fha loans?
Message edited 6/4/2015 7:34:57 PM.
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| Posted 6/4/15 7:34 PM |
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newbie00
LIF Adult
Member since 3/11 1191 total posts
Name:
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House Savings
Conventional with 20% down no PMI, Conventional with less than 20% pay PMI until you've reached 20% in equity, FHA loans you pay PMI for the life of the loan but you can get a loan with as little as 3.5% down.
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| Posted 6/4/15 8:19 PM |
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MissJones
I need a nap!
Member since 5/05 22150 total posts
Name:
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House Savings
We used wedding money for our first place (co-op).
For our house, we used whatever savings we had mustered and the profit from the sale of the co-op, which was NOT as much as we had anticipated years ago because we sold for less than what we purchased. But it allowed us to put down 10%. We still have pmi, but we took out a conventional loan so it will be off in 5 years or so.
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| Posted 6/4/15 8:27 PM |
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MrsB12614
LIF Adult
Member since 4/14 1986 total posts
Name:
Mrs
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House Savings
We are in the process of searching for our first home now. Our goal is to put 10% down. May not happen depending on the home price but I will not clean our savings account just to hit that 20% number I'll be putting down what we are comfortable with and will leave us with a good amount in savings
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| Posted 6/4/15 9:09 PM |
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LuckyStar
LIF Adult
Member since 7/14 7274 total posts
Name:
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House Savings
We saved one salary from the time we moved in together, about 2.5 years before we bought our house. We didn't put 20% down (though we did get a conventional loan). Our old apartment was super cheap, which is really how we did it. No one gave us a dime.
Being our rent was so cheap, our mortgage seems like it's a fortune!
ETA: Regular old savings account!
Message edited 6/4/2015 9:58:07 PM.
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| Posted 6/4/15 9:57 PM |
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Millie3
LIF Adult
Member since 7/13 1280 total posts
Name:
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Re: House Savings
Used a regular account, and put 20% down on the house. Sold a coop after the purchase and paid down the mortgage w the proceeds. We did not want to pay PMI, so had to be 20 %. We paid it on the coop (10% down) , felt like it was a waste of money.
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| Posted 6/4/15 9:57 PM |
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gina409
TWINS!
Member since 12/09 27635 total posts
Name:
g
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Re: House Savings
We lived apart until married,then lived in my sisters basement when we got married and paid a really small
Rent. Then moved into my mil basement where we paid no bills.
4 years of doing. All that and we saved every penny and put 20'perxent down from
Savings
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| Posted 6/4/15 9:58 PM |
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BlackJack96
LIF Infant
Member since 6/08 245 total posts
Name:
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House Savings
For me personally, I don't think I could put less than 20% down on a place. I think given the volatility of the market and the risk of it going down, safer is better. If you say you can't save the 20% either you wait until you save more OR you buy less house.
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| Posted 6/5/15 1:23 AM |
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Shroggie
Don't Worry...Be Happy
Member since 5/06 6261 total posts
Name:
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Re: House Savings
Lived on DHs salary and banked mine. We saved the fastest that way. We were able to put down 20%, but opted to only put down 10% and save the rest for furniture and small repairs. After 3 years, we had paid enough on the mortgage to remove pmi, so it was not a big deal to have the extra $144 pmi payment for only a few years.
Eta: We paid off our car loans before saving, so it was easier to save and we also lived in an apt in my inlaws house, so the rent was cheap (if they even took any $ at all).
Message edited 6/5/2015 5:51:36 AM.
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| Posted 6/5/15 5:37 AM |
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BsMomma2014
Fly high little one
Member since 6/10 2662 total posts
Name:
nicole
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House Savings
After college we both moved home and stayed there until we got married. We saved and saved so we were able to put 25% down.
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| Posted 6/5/15 6:01 AM |
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Re: House Savings
Posted by newbie00
Conventional with 20% down no PMI, Conventional with less than 20% pay PMI until you've reached 20% in equity, FHA loans you pay PMI for the life of the loan but you can get a loan with as little as 3.5% down.
This, but I believe conventional just modified it's loan program so that now buyers can even do 3% down (5% used to be the minimum).
Aside from down payment, the credit and d-t-i requirements are stricter with conventional, though. So if you have less than stellar credit or a higher dti, FHA may be the only option. It's harder to qualify for a conventional loan.
The pmi is less with a conventional than FHA - in terms of what you pay monthly and there is also an upfront mortgage insurance payment you roll into the loan with FHA. So FHA interest rates are usually a bit lower, but that's offset by the higher pmi in what you pay per month.
There are some other slight differences. Certain types of purchases require a conventional loan -- co-ops, certain condos (condo purchases can be financed by FHA IF the condo development is on the approved list). Also, in terms of the appraisal, FHA has compliance requirements that are stricter than conventional... so FHA will require handrails, smoke and C/O detectors, no peeling paint. If a house is in run down condition, it may be easier to get a conventional loan (although sometimes even a conventional loan is not a possibility and you need a cash buyer or a specialty rehab loan). Also, an FHA appraisal stays with the property for a certain period of time - so if a buyer is getting an FHA loan and backs out, and there's a new FHA buyer, the new FHA buyer is stuck with the first appraisal that was done if it is within the timeframe (used to be 6 months but I think it may have shortened to 4).
Also, if you are planning on rolling your closing costs into your mortgage (via what's called a seller's concession, but it's really the buyer financing all or part of the closing costs), FHA allows you to roll in up to 6% of the purchase price, but with conventional, it depends on the down payment. If you put down less than 10%, closing costs you can roll in caps off at 3%.
Bottom line, if you can qualify for a conventional loan, that's the way to go because of the PMI issue. The only way to get rid of PMI on an FHA loan now is to refinance to a conventional loan down the road.
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| Posted 6/5/15 9:19 AM |
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HomeIsWithU
Baby #2 on the way!
Member since 9/07 7816 total posts
Name:
Jenn
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Re: House Savings
Posted by BeachGrl
Can anyone explain what the pros/cons are to conventional vs fha loans?
I personally would try to stay away from getting an FHA loan. In general it's lower income, poorer credit, higher debt-to-income ratio applicants. When we were selling our place our realtor and mortgage broker told us to be very leery about offers that were FHA loans. They both told us that many times those buyers are not approved for the mortgage in the end and the deal falls through. We turned down 2 FHA offers. I also know of 3 separate people whose offers on houses were rejected for the sole reason that they were FHA loans putting so little down payment down.
Just my 2 cents, and I know everyone's situation is different, but IMO if you can do a conventional loan and put a little more down I think they are received better than FHA loans in general.
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| Posted 6/5/15 9:19 AM |
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cets1290
LIF Adult
Member since 6/14 1051 total posts
Name:
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Re: House Savings
Posted by haveaquestion
Someone I work with is saving with this programfirst home program
A couple of banks offer similar programs.
This! We did the first home club through HSBC and got an amazing rate (3 1/8%) and got $7500 towards our down payment/closing costs. We put about 58k down, and borrowed another 10k from my parents to get 20% down. We just have to pay my parents back now =/ lol
For me, I felt that i would rather borrow from my parents to get 20% down and pay them back, rather than pay a little less than 20%. I just felt a lot more comfortable that way, idk
Message edited 6/5/2015 9:35:48 AM.
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| Posted 6/5/15 9:33 AM |
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WonderLady
LIF Infant
Member since 1/15 355 total posts
Name:
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Re: House Savings
Posted by HomeIsWithU
Posted by BeachGrl
Can anyone explain what the pros/cons are to conventional vs fha loans?
I personally would try to stay away from getting an FHA loan. In general it's lower income, poorer credit, higher debt-to-income ratio applicants. When we were selling our place our realtor and mortgage broker told us to be very leery about offers that were FHA loans. They both told us that many times those buyers are not approved for the mortgage in the end and the deal falls through. We turned down 2 FHA offers. I also know of 3 separate people whose offers on houses were rejected for the sole reason that they were FHA loans putting so little down payment down.
Just my 2 cents, and I know everyone's situation is different, but IMO if you can do a conventional loan and put a little more down I think they are received better than FHA loans in general.
I think your broker misled you because SHE felt better with conventional, lol. I am in the business and see more and more fha every single day. A deal can fall apart for a million reasons. Here on LI unless you are gifted money, inherit money, or have a chance to live in someone's basement while you bank checks, it is VERY HARD to put together 80k+ for 20%.
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| Posted 6/5/15 9:34 AM |
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WonderLady
LIF Infant
Member since 1/15 355 total posts
Name:
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Re: House Savings
Posted by Century 21 Dallow - Christine Braun
Posted by newbie00
Conventional with 20% down no PMI, Conventional with less than 20% pay PMI until you've reached 20% in equity, FHA loans you pay PMI for the life of the loan but you can get a loan with as little as 3.5% down.
This, but I believe conventional just modified it's loan program so that now buyers can even do 3% down (5% used to be the minimum).
Aside from down payment, the credit and d-t-i requirements are stricter with conventional, though. So if you have less than stellar credit or a higher dti, FHA may be the only option. It's harder to qualify for a conventional loan.
The pmi is less with a conventional than FHA - in terms of what you pay monthly and there is also an upfront mortgage insurance payment you roll into the loan with FHA. So FHA interest rates are usually a bit lower, but that's offset by the higher pmi in what you pay per month.
There are some other slight differences. Certain types of purchases require a conventional loan -- co-ops, certain condos (condo purchases can be financed by FHA IF the condo development is on the approved list). Also, in terms of the appraisal, FHA has compliance requirements that are stricter than conventional... so FHA will require handrails, smoke and C/O detectors, no peeling paint. If a house is in run down condition, it may be easier to get a conventional loan (although sometimes even a conventional loan is not a possibility and you need a cash buyer or a specialty rehab loan). Also, an FHA appraisal stays with the property for a certain period of time - so if a buyer is getting an FHA loan and backs out, and there's a new FHA buyer, the new FHA buyer is stuck with the first appraisal that was done if it is within the timeframe (used to be 6 months but I think it may have shortened to 4).
Also, if you are planning on rolling your closing costs into your mortgage (via what's called a seller's concession, but it's really the buyer financing all or part of the closing costs), FHA allows you to roll in up to 6% of the purchase price, but with conventional, it depends on the down payment. If you put down less than 10%, closing costs you can roll in caps off at 3%.
Bottom line, if you can qualify for a conventional loan, that's the way to go because of the PMI issue. The only way to get rid of PMI on an FHA loan now is to refinance to a conventional loan down the road.
Everything you said!! You know a heck of a lot about loans!
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| Posted 6/5/15 9:36 AM |
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Re: House Savings
Posted by HomeIsWithU
Posted by BeachGrl
Can anyone explain what the pros/cons are to conventional vs fha loans?
I personally would try to stay away from getting an FHA loan. In general it's lower income, poorer credit, higher debt-to-income ratio applicants. When we were selling our place our realtor and mortgage broker told us to be very leery about offers that were FHA loans. They both told us that many times those buyers are not approved for the mortgage in the end and the deal falls through. We turned down 2 FHA offers. I also know of 3 separate people whose offers on houses were rejected for the sole reason that they were FHA loans putting so little down payment down.
Just my 2 cents, and I know everyone's situation is different, but IMO if you can do a conventional loan and put a little more down I think they are received better than FHA loans in general.
I have to disagree. I think it's always better for the borrower to go conventional when they can, because of the pmi issue and it's less costly.
But that being said - I sell many, many houses as a listing agent AND a buyer's agent where the buyers get FHA loans. They are very popular, especially in areas and price ranges where you have a lot of first time buyers. But also, I have a listing out east right now that is a large colonial listed for $629,000, and the buyers we just went into contract with are getting an FHA loan with 3.5% down. It's highly unconventional to do that with a house in this price range, but I fully vetted their financial qualifications, and the buyers are solid. The house is a buyer specific house that my seller needs to sell. At the end of the day, she's getting the $$ she needs in her pocket, so it kind of doesn't matter to the seller whether the loan is VA, FHA, conventional, SONYMA, etc. - as long as we are assured that the buyers can get the loan and have their preapproval from a reputable lender who can confirm it's good to go.
Knock on wood, but I've never had an FHA buyer NOT be able to get a mortgage commitment (but again, I do my due diligence with all buyers, regardless of whether I'm the buyers' agent or seller's agent).
I agree that IF there is a multiple offer situation on a hot house, and someone with FHA/3.5% down is competing with a conventional/20% down buyer, and the offers are in the same ballpark, the conventional buyer with more down will have the edge. I would always advise my seller to take the offer with better terms, which would be the conventional.
But if the FHA offer was the only one on the table and the buyer was qualified, I would never advise a seller to turn down an offer because it's FHA. And in my experience, that doesn't happen.
Also, everyone has their personal comfort zone, but I don't think it makes sense for people to necessarily wait to save more. Most people may save $10K a year, if they are lucky, but with rising prices/rates, that $10K can be easily offset or be rendered meaningless. And for some, renting no longer makes sense for them -- they may want the stability, tax benefits, etc. of home ownership. (I'm not against renting, as I rented in NYC for years before buying, and I put 20% down.... but i recognize that FHA is a great program for many buyers.)
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| Posted 6/5/15 9:36 AM |
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