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I'm just curious. My husband and I have been saving for a long time so we can put down 20% on our home, and we just bought our dream house doing this! Curious who else saved up 20%, or if that's not really the norm anymore.
We're going to put 5-10% down..would love to put 20% down, but not sure we'll have it in the next year when we buy a house. We just started looking at homes online a week ago and the prices are so good in our area that we don't want to wait more than a year to buy. So if/when we find a great house for a great price, we'll put down probably about 5-10%.
That's fantastic you guys saved up 20% and got your house. :)
I watched a House Hunters for a couple buying in 2007 in Atlanta - both just out of college, newlyweds, buying a $500,000 house with nothing down. ZERO. This is why the country is in the trouble we are these days! Who would LEND THEM THAT? I wondered if they were effected by the economic downturn and whether they were still in that house. Even if they were in school to become something lucrative, if they don't have a down payment at least, they're not made of money yet! You can start in a more modest house than that. We put down .. i want to say 30-35%.
We put down 10%.
Kudos to you for saving for 20& in the Chicago market! That's a lot of money (I assume).
@ Melissa: we bought right before the credit crunch got huge, but after the bottom fell out of our local market (Sacramento was one of the first to crash). Banks were just starting to restrict lending, and FI was still approved for $450,000 with less than 10% of that amount to put down. We of course bought a house for much less, but it still amazes me what they were willing to lend. The monthly payment after tax insurance would have been more than half of take home income.
I suspect the result will depend on the price of housing in your area, particularly if you live in an area with expensive property. We are saving up about 10% to buy our first house, but if we were to buy in another city with cheaper prices for the same amount of house, the money that makes up our 10% would actually be about 25% of the house price.
Not purchasing a home at this time, but we intend to save atleast 20% when we do purchase a home...the whole 0% down/loan for downpayment is what got us into this whole crisis anyway! Terrible that they'd let anyone actually do that.
While you can get away without putting 20% down, you have much better perks in terms of if you want to refinance. We closed at 6% and rates went down to 4.75 in our first year so because we had put 20% we were able to get that rate. Friends of ours weren't because they didn't have enough $ into the house. Food for thought.
We put down a little more than 20% down (note for honesty’s sake: by “we” that really includes FH’s parents, who each contributed a sizeable amount of the down payment).
I don’t know if you “need” 20% anymore, but I personally wouldn’t be comfortable putting less than 10% down, and I’d prefer to put down 20% to avoid PMI. (I don’t know if all loans do PMI, I’m a little house-loan uneducated).
Our goal is to have 10% down when we buy a house. In our market, and our price range, that's about $12k. Which is going to be really tough for us, considering that $12k is HALF of my yearly pay. :(
@Chelsea Great point. That's the same with us-our 10% down would be 20% or so for a comparable house in a cheaper area. Although our area houses are selling for great prices right now, we still live in a pricey area. Friends of ours can buy the same house in other states for almost half the price.
Our problem is going to be selling our townhome. We'll most likely take a loss on it-that's our biggest factor as to what we can buy. And I'm worried our townhouse will sit on the market a long, long time...(We're looking at 4 bdr/ 2 1/2 single family homes)
It's a buyer's market in our neck of the woods. There are deals to be had, but we aren't rushing..we're going to take our time.
Yes, kudos to all of you who put down 20% or more. :)
I agree with chelseamorning. It totally depends on where you live. A modest town house in my area is about $500,000. So 20% down would be $100,000, which would be half of a house in many areas of the country. Sometimes it makes sense to buy even if you don't have the full 20%.
We put down 10% as well. We would have probably waited longer and saved up more, but the mortgage rates were too low to pass up last year!
I put 20% down and so glad I did because with home values falling, it is a good protection from being underwater on your mortgage. Plus, no PMI.
We did 10% - we maybe could have done a little more since we got our house at a steal, but we were very comfortable with the mortgage payment and decided to renovate a few things instead. We're pretty happy with that outcome!
We put down the required 3.5% for FHA loan. We bought a foreclosure and we qualified for the 203k loan which gave us additional money to fix up the house. We borrowed the money for thr down payment from FI's uncle.
I guess I'm going to be one of the few who thinks it's okay not to put anything down with the ONLY stipulation:
You don't intend on staying in the home.
I didn't put ANYTHING down when I purchased my home. I did have money saved up, but I intended on using that money to fix anything wrong with the home. I had, and still don't have, any intention on staying in my home long term.
With that being said, I've been in my home 4 years, and the only reason why I continue to stay in it is because of the recession, otherwise, I would have tried to sell it either this year or next year. Being as everyone is getting back on their feet, including myself, I probably won't consider selling it for another 3 years.
I don't see the purpose on saving SO much money to put down on house that you KNOW you will leave within 5 years. Now, it'll be a different story when I want to put roots down for real.
P.S. I also knew to have a fixed rate mortgage from the beginning. Didn't want to add any additional risk. My belief is that alot of people are in trouble because they went the interest only mortgage route instead of fixed.
When we buy a house, we'll be shooting for at least 20%. The financial crisis was caused, in large part, by people putting less than 10% down, and then being so upside down on their mortgages that it caused market collapse. Not this girl!
We didn't put any down. We didn't need to with the type of loan we got, we locked in our rate, and our mortgage is only $200 more a month than our rent was. Plus we don't have all the utilities that we did when we rented, so we save money in that area. I don't see anything wrong with not putting money down. It doesn't work for everyone and I still think we made an awesome decision to buy when we did. We had our house appraised (before we had ANY landscaping done, driveway, etc *our house was built for us*) and it appraised for 40K+ more than what we purchased it for. I'm not worried about it at all.
FHA and USDA loans don't require any money down, but they do come with restrictions - like location, income, etc. I still think it's a good idea to have a little bit down, espceially if your credit isn't shiny and spotless. :)
We plan to save 20% before we even start looking for homes. Shouldn't be hard since we get to live rent free after the wedding until we purchase our home :)
We put 20% down when we bought our home. We were BROKE beyond broke when we did it, but now that we have recovered we feel like it was totally worth it because now we save each month with a significantly lower mortgage payment.
We did a rural development loan. It was perfect for us because we actually had an idea of what we wanted to do before we went in to talk about getting a loan. There wasn't anything that we wanted to do that we couldn't. And our credit is spotless.
We will have to put 20% or maybe even 25% down if we buy in NYC. We have some saved now, but will be actively saving after the wedding.
Nope...we won't be putting down 20%. We'll be doing a VA loan which doesn't require a down payment. Even better, unlike other loans where you have to pay PMI if you don't put 20% down, we don't have to do that either. So, we're pretty excited! We'll be using the money that would have been a downpayment to furnishing/fixing up the new house.
I bought a couple of years ago (alone, but my bf lives with me now) and put down just under 30% in CT (NYC metro area).
Loans are more competitive in terms of interest rate and there will be no PMI if you can put down at least 20%.
We both put down 20% on our homes 5 years ago. We did this to avoid paying PMI (mortage insurance). We sold his home last November (so happy it sold) and we plan to live in my home at least 1-2 years. We have the 20% now from selling his home but we want to save even more and put down even more so we don't have to pay more in interest in the long run.
We put down about 5%. We had enough for 10%, but we held back the other 5% to furnish the new house and do some painting, etc. Honestly we could've saved up 20% if we'd waited a bit longer (we're only 25 and I was only 1.5 years out of school), but with the first time homebuyer thing it just seemed like it was the right time to buy.
Ooo something else to that my husband and I just got clued into. We are starting to pay the mortgage 4x a month and it just gets automatically deducted from our account rather than paying one big check at the end of the month. We have a 30 year mortgage, apparently it is going to save us $16,000 in interest and up to 7 years in payments to do it this way in the long run.
Just thought I'd share that with others in case you were interested in doing it that way yourselves.
Unless you get a break for being a first time home buyer and they make an exception, you get stuck with paying mortgage insurance if you put down less than 20 percent. All that extra money for mortgage insurance goes out the window and you never get it back. I'm so happy we've worked hard to save up our 20 percent, now we just need to find the right place.
We put down about 5% but we wish we had done 20 to avoid PMI. We had to buy because I was 6 mos. pregnant and we were living with FI's parents. Also, we bought at the best time ever. A comp house on our block just sold for almost double of what we paid last year.
I like bloodgo1's tip! I know the interest really adds up. That's why we are going to try to save closer to 30% for a down payment and go with a 15 year mortgage.
We put down 20% on a 30-year fixed rate 4.62% mortgage. :) Personally, anything other than fixed rate is just crazy and the reason the market fell out so be careful what mortgage you get because it can bite you in the butt!! Because we bought during the government pay-out bit we got the $8k back with our taxes and are able to really give our house the updated look we love. Awesome!
We would never put down less than 20%. A lot of people won't be able to get a traditional loan without a decent downpayment anymore.
We actually put down more than 20%, and it was worth it. I can hardly imagine what our monthly payments would be if we had put zero down and had a higher FHA interest rate!
FH bought in 2006 when the market was great - he put down 25%. He invested money that his grandparents gifted him when he graduated college in 1999. He made some very smart decisions and voila there you have it. After we get married we hope to purchase a stand alone (right now we live in a 4 story city townhouse) and we plan on putting 20-25% down...
My FI did...I'm amazed he was able to save that much (he bought the house right before we met) but I think it really says a lot about a person if they're able to do that.
I put in 20% when I bought my house to avoid the additional point in interest. In order to do so, I withdrew a small loan from my 401k. I don't think it is for everyone, but I made the right decision to do so. Right after I did, the market tanked. I do repay that loan with a small interest but I pay it to myself. The few grands I needed to make up the 20% allowed me to save thousands of dollars down the road..not to mention I would have lost a lot more when the market did a dive. My experience is that you also get wiggle room to negotiate with seller when you have more in downpayment.
We only put 3.5% down, FHA loan. We are planning to stay in our place forever, got it at a 4.87% interest rate. Also we caught the tax credit back at the end of the year.
We grew up in households where both of our sets of parents never even owned a home while we were growing up so we didn't know to save, save, save. In Hawaii, having 20% down is astronomical so almost every one of our friends who have been married simply bought a townhouse first b/c of affordability. We didn't have as much up front but didn't want to buy/sell/buy or move/unpack/move so we just bit the big bullet with a 3 bdrm house even though on paper, we weren't 20% ready. We are in good shape financially even though we put very little down. We have a decent mortgage that we are paying off as quickly as possible, with lots of extra a month and extra annually so it was all about timing for us. *We are also debt free, except a minor student loan. Everyone's situation is different. I think 3.5% can be smart for some people.
my first house I put down 5% I think, but my 2nd house...I hadn't sold my 1st, and I was able to do 0% down very easily....luckily it has worked out very well, and now that house is a rental
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