Down Payments

Sorry if this is a repeat ..

DH and I are beginning to look at houses (open houses here and there). What are most people putting down on houses these days? Can you do 10%? Or is that way too low?

Thanks for any info!

Re: Down Payments

It depends what you can afford. Some people do 0%, 5%, so 10% would definitely be doable, as long as you can afford the mortgage.

Re: Down Payments

The amount we put down ended up being 12%. We took out a home equity loan for 8% to supplement that, so that we don't have to pay PMI.

Re: Down Payments

if your credit is very good (over 720), you can even put 0 down if you want and still get a good interest rate.

but don't forget that you will have to pay PMI monthly (which can cost $200-$300 a month) if you don't out down 20%. what a lot of people do to avoid that cost is take out a 2nd loan for the 20% down, but the rates on that 2nd loan are typically prime + 1/4 - 1/2 (so around 8.5%).

what you have to decide is, is this a house you're going to live in long term (more than 7 years). if it is and you have the 20%, it is definitely worth to put it down. some people who know they will only be in the house for a short while take out interest only loans or put nothing down so they can keep their $ liquid. another factor is how much work the house needs. you may want to use your cash to fix up the place if it needs a lot of work.

if and when we even buy a house, I would like to put 10% down, minimum.

good luck

Message edited 4/16/2006 10:28:37 AM.

Re: Down Payments

We did 5%. We avoided PMI by doing a 85-15-5 loan. Lots of banks have this as an option. Basically, we have a traditional mortgage for 85%, a home equity for 15%, and we put down 5%.

It's very common nowadays to put less than 20%.

Message edited 4/16/2006 8:49:20 PM.

Re: Down Payments

We did 5%. We had compared 2 different ways of doing it. I will try to be brief. We compared (for us) to do a split mortgage or a 30 year fixed (which included paying PMI) . For some reason when we compared the two, the 30 year fixed would only cost us an extra $50 a month. (We used a union program through Chase bank.) We are planning on staying in this house for a very long time so we figured the 30 year fixed was in our best interest. Hopefully, down the line, we can reassess and drop the PMI. It's probably best to look at all of your options and then decide. It all sounded like gibberish to me but after awhile, it started to make sense. Good luck!

Re: Down Payments

over 30%

Re: Down Payments

We're in FL and we used our land that we built on as our downpayment. When we signed all of our papers the only cash we had to give was processing of all the permits.

Re: Down Payments

we did 10% and used an 80/10/10 mortgage to fund the rest.

3 Years later we refinanced to get rid of the two loans.

We just bought a condo as well and only put down 5% using an 80/15/5 loan. We will probably sell that property before refinancing it.

Re: Down Payments

I would put at least 10% down if possible.

Re: Down Payments

Re: Down Payments

We put down 10%. We avoided paying a PMI by doing one mortgage and a Home Equity type mortgage. It works for us!

Good Luck!

Re: Down Payments

Thanks so much for your replies! It's all very helpful! :)

Re: Down Payments

We're doing 20% - we didn't want PMI and we didn't want the piggy-back loan.

A year ago we were only putting 10% down and were viewed as "less desireable" by sellers...but the market was different then. Regardless, I'd put down as much as you can. Jmo.