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2boys4me
He's coming soon!
Member since 4/10 4260 total posts
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First time homebuyer
How much should you put down as a down payment?
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Posted 8/29/12 3:17 PM  |
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Long Island Weddings
Long Island's Largest Bridal Resource | Prudential Douglas Elliman Real Estate |
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Re: First time homebuyer
I don't think there's a "one-size fits all" answer. It really depends on the financial situation of a particular buyer, what type of loan product they qualify for, what monthly payments they can afford, whether they plan to do work on the house (or need more cash reserves for other things), whether they have enough for closing costs, etc.
With an FHA loan, you can put as little as 3.5% of the purchase price down (and some specialized loan programs, like VA or SONYMA require even less). With a conventional loan, you can put down as little as 5% if you have excellent credit and debt-to-income, but if you put down less than 20% you will be paying pmi. (With an FHA loan, for the first 5 years, mortgage insurance is paid regardless of the down payment).
If you are considering the purchase of a co-op, then an FHA loan is not an option, and many co-op boards have financing restrictions/minimum down payment requirements.
I really recommend speaking to a knowledgeable mortgage loan officer to get advice specific to your circumstances. Let me know if you need a recommendation!
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| Posted 8/29/12 3:57 PM |
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ANR1211
My loves
Member since 2/11 2131 total posts
Name:
A
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First time homebuyer
20% if you can swing it.
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| Posted 8/29/12 5:14 PM |
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ElizaRags35
My 2 Girls
Member since 2/09 20494 total posts
Name:
Me
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First time homebuyer
We put just over 3.5% down. FHA loan w/ seller's commission.
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| Posted 8/29/12 5:29 PM |
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AScottWolf
I <3 our squish!
Member since 11/10 2237 total posts
Name:
Adriana
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Re: First time homebuyer
We put down 10% with a conventional loan.
Message edited 8/30/2012 11:13:16 AM.
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| Posted 8/30/12 11:12 AM |
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hope42009
On a journey! :)
Member since 9/08 1274 total posts
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Re: First time homebuyer
How much money do you have to put down with a SONYMA loan?
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| Posted 8/30/12 3:10 PM |
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Re: First time homebuyer
Posted by hope42009
How much money do you have to put down with a SONYMA loan?
I believe you can do 97% financing, so only 3% down (compared to 3.5% with FHA). But I think their are also ways to get down payment assistance with SONYMA so you don't even need 3% cash to put down.
I've only ever had one buyer go the SONYMA route, so I don't know all of the ins and outs. But my buyer was very happy with the mortgage lender he used (who was very well-versed in SONYMA), so I'd be happy to pass along his info to anyone interested.
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| Posted 8/30/12 6:38 PM |
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Re: First time homebuyer
There really is no good or bad answer for this one IMHO.
It depends on your situation, honestly.
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| Posted 8/31/12 10:52 AM |
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LoveMyFamily
LIF Toddler
Member since 1/11 418 total posts
Name:
Alyson
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Re: First time homebuyer
People love the FHA loans, but rates are higher, or there's some additional fee that, if you can afford a higher downpayment, make it not worth the extra fees. (I looked into it a year ago, but forgot now.)
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| Posted 9/6/12 4:05 PM |
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MrsRapz
mahna mahna!
Member since 2/12 1952 total posts
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First time homebuyer
assuming you have unlimited funds, i'd say 20% is the best.
20% means you'll get the best rate from the bank, and you won't have to put all of your money into the house right away. You'll have it for renovations, emergencies, etc. Interest rates are so low these days that it's not a huge loss, ultimately.
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| Posted 9/6/12 5:57 PM |
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Re: First time homebuyer
Posted by AlyJD
People love the FHA loans, but rates are higher, or there's some additional fee that, if you can afford a higher downpayment, make it not worth the extra fees. (I looked into it a year ago, but forgot now.)
Actually, with FHA loans, the interest rates are lower, but you do come out ahead with a conventional loan IF you can put 20% down and avoid paying pmi. With the FHA loans, you always have mortgage insurance (for the first 5 years at least), and there is also an upfront mortgage insurance payment (it used to be 1% of the loan amount, but now I think it's like 1.25%) that gets rolled into your mortgage loan.
If you have 20% down, getting a conventional loan is a no-brainer. But an FHA loan is great alternative, esp. for a first-time home buyer. If going the FHA route is the only way to afford a home now, for many people it makes sense to go that route rather than wait and save. In the future, both prices and interest rates will undoubtably be higher. So, imo, it's better to buy now with an FHA loan than wait until you have saved enough cash to put 20% down.
Mortgage insurance can be removed down the road, but prices and rates can't be changed once you buy (well, you can refinance to get a better rate, but most economists say rates won't be this low again, at least not for a very long time!).
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| Posted 9/6/12 6:10 PM |
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