Post # 1
DH and I are getting anxious to get into a home of our own. We’ve been renting and we’re paying around $900 a month for rent and utilities on a 1,000ish square foot apartment. It’s a great spot, but when we’re making less than $3K combined each month, it’s hard to be able to do some things that we want to do (like have kids). We know that even fairly large houses in our area are going for pretty cheap right now and the mortgages are fairly low, I just don’t know if we have enough saved yet for a decent downpayment and closing costs, etc. So, we’re meeting with a mortgage officer today at our credit union to see what they have to say.
How much did you wind up paying as a down payment on your house? Are you glad you saved longer to put more down or would you have been happy to pay less and have a bigger mortgage, but still have more space?
Post # 2
We are putting 10% down (about $28,000) on the home we are building that will be finished in July. Our loan only requires 5%, but we wanted to lower the monthly payment a bit. We could go up to 15% down, which we have contemplated, but have decided to keep the money in the bank. We decided to buy now because the area we are building in is becoming popular and prices/interest rates are starting to rise. We figured it was best to buy now, especially since our employer (we work at the same place) is providing housing stipend incentives that can go towards down payments. We also are lucky to have a builder’s incentive where the preferred lender will cover our PMI and we can still get a loan 4.5% interest (which is good for our area). It has taken us about a year to save for the down payment.
Depending on your area and your situation, you will likely have to put down at least 3.5% of the total cost, plus closing costs. There are loans that do not require a down payment, but they come with requirements (VA loans, USDA Rural Loans). With an FHA (which is 3.5% down), you will have to pay pre-mortgage insurance (usually between $50 and $150 extra a month) for the entire life of the loan, thanks to recent legislation changes.
Basically, the less you put down, the more you will actually pay for the home. So you have to decide what is important to you. Your “monthly” payment may seem reasonable regardless, but putting down less could mean paying thousands (literally) more in the end. Here is a helpful calculator you can use to tinker with the numbers. http://www.mortgagecalculator.org/
Post # 3
- Wedding: September 2014 - Turf Valley
I went via FHA financing and put down 3.5%.
We saved for 1.5 years. That’s not how long it took us to save 3.5%. The rest of the money we saved is now our “safety net”. I prefer having a slightly larger mortgage payment and having a large safety net versus a few hundred less in mortgage and not much in the bank.
Post # 4
We paid about 23%. We were planning to pay 20% just to avoid PMI, but for the county we were in, we had to pay a little more so the mortgage would be at/under a certain number so that it would be a conventional loan rather than jumbo with a higher rate. We already had the money and could have paid more so saving longer wasn’t really an issue. If we could go back though, we’d actually get a smaller house. After being in the house nearly 4 years, we’ve realized it’s just more space than we will likely ever need, even with a kid or 2.
Post # 5
We did 20%. I wouldn’t put less than 20% because of PMI and that’s what most mortgage companies want to get the best rates.
Post # 6
We put 20% down, but we already had a 6 month emergency savings in place plus some extra for other home expenses (i.e. appliances, tools, etc). While I think it’s great to have a large downpayment (saves you a TON of money over the duration of you loan), I wouldn’t deplete my savings just to put 20%+ down.
Post # 7
My SO and I just bought a house. We had anticipated being able to put down 20% and were really happy with that because it meant we didn’t have to get mortgage insurance and that we’d have more smaller monthly payments/smaller mortgage in general, but get way more space than if we rented something for similar money.
Unfortunately we hadn’t anticipated closing costs to be quite as much as they turned out to be. We budgeted what we thought was an over estimation to be safe, but we were wrong. So in the end, instead of having 20%, we only had 15%. Will we survive? Sure, no problem. Do we wish we’d waited just a smidge longer as a result of the higher than anticipated closing costs? Absolutely.
Post # 8
- Wedding: August 2013 - Rocky Mountains USA
We put down 10%, plus you need some money to cover closing costs. Our house was relatively inexpensive and we have a pretty low interest rate, so even though we have to pay an extra 0.5% private mortgage insurance (because we had under 20%), it’s not that much extra – $40 a month or something.
Post # 9
alt_bride: How much were your closing costs? Both of us are brand new to this whole process, and I’m not sure what we should be expecting…
Post # 10
hogoboom2012: You can ask the seller’s to pay the closing costs as part of your contract. Typically closing costs are 3% of the house, the seller can pay half or you can negotiate them to pay more. I think we paid about 1K for closing but it can be A LOT more.
Post # 11
hogoboom2012: I bought my first house for around $250,000 when I was single. I put 5%, and took the mortgage over 35 years (when you could still do that!) so I could have smaller payments and afford it as a single lady. BUT, if you put less than 20% here in Canada (not sure if its like that in the US), you pay a special housing insurance fee, CHMC. So of my $12, 000 down payment, $7100 went to pay for this fee!
Now that FI are together, we are going to put 20% on our next house. We will probably build, and the house will be around $500,000 I’m sure, so we’re trying to save $100,000. This is insane! With saving for our wedding and paying for my Master’s, and still having a life travelling, this isn’t going to be an easy task, but we will get there as I don’t want to pay that fee again!
Post # 12
It should be a little over 30% if we got to the top of the budget
Post # 13
FI and I bought a house on Friday! Yay! We put 20% down ($31,000) to avoid mortgage insurance and lower our monthly payment (as PP have said). Our closing costs were about 3% of the house cost ($162,000). You can add it into your negotiation for the seller to pay them which is what we did. It’s nice not to have to pay that extra $5000 in cash right after putting 20% down.
Post # 14
PMI sucks – but if you don’t have 20%, you don’t have 20%.<br /><br />We went with a conventional loan and put 5% down. We had 3% seller’s assistance and our sellers were really good about lowering the cost of our house when we realized we couldn’t get 6% sellers assistance because we weren’t putting 20% down. It really is made to make it more difficult for people putting less than 20% down – but it really was worth it for us.<br /><br />We didn’t want to give up ALL of our savings – that would be worse. <br /><br />Also remember that if you go FHA you have to pay PMI the ENTIRE life of the loan (as in, 30 year mortgage – you pay PMI all 30 years). Since we could do conventional, we did, and it was the better option for us.
Post # 15
- Wedding: June 2014 - Excalibur
My first house I put over 20% down. My current house 16%.PMI drops of after 24 months if I don’t pay a cent extra towards my mortgage. Way cheaper than fronting an extra $6000.