What percent down payment did/will you put toward your home?

posted 3 years ago in Home
  • poll: What did you do?
    3-5% : (40 votes)
    26 %
    6-10% : (24 votes)
    16 %
    11-20% : (40 votes)
    26 %
    21% + : (39 votes)
    26 %
    0-2% : (9 votes)
    6 %
  • Post # 4
    Member
    2056 posts
    Buzzing bee
    • Wedding: September 2013

    Commenting to follow!  I am curious about what others are doing, too.

    Post # 5
    Member
    855 posts
    Busy bee
    • Wedding: December 2012

    @bmo88:  We ended up putting about 10% down.  I am totally with you about wanting to have a larger percentage down as that’s what I originally wanted to do.  However with the mortgage interests rates so low, we ended up going ahead with it now because the money would go much further.

    Some perspective: when my parents bought their first house in the 80’s for about 80k the mortgage payments (I think they put between 10-20% down) were over $1000 because the interest rate was over 12% at the time.  Our mortgage payment for a house in the 160k’s for less than 4% interest is less than $900 a month.

    Anyway, I’m all on board for having a cushion, but be flexible in case the interest rates go up.  You can always get a mortgage with no penalties for paying more than the minimum payment and pay off the loan faster while still benefiting from the low interest rates because at some point they are going to start going up.

    Post # 6
    Member
    1016 posts
    Bumble bee
    • Wedding: August 2014

    We make decent money, but we also paid a lot in rent for a total craphole of a place, so we weren’t getting ahead on the down payment and our rent kept getting increased. We got a mortgage with only 5% down, but in case (when) interest rates go up, we could afford up to 10% interest assuming we didn’t pay off any of the principal until then. We can afford our $260k mortgage at 2.98%, and we could afford it at 10% too, albeit not very happily.

    I think that is key, to not be screwed when interest rates rise. You do need a lot of cushion because if you’re anywhere near your max at interest rates as low as they are currently, you’re going to be screwed when interest rates go up.

    Post # 7
    Member
    282 posts
    Helper bee
    • Wedding: October 2011

    For our first home we put 20% down as we had shares that we could sell that could provide us with the full down payment. We now rent that home out and are looking to purchase a cattle property in the next 6 months or so and will be using a 15% deposit as we can’t really sit around and wait. Cattle properties ( rather,  good ones) are few and far between. 

    Post # 8
    Member
    920 posts
    Busy bee
    • Wedding: June 2015

    we only put 5% down, since its all we could really afford. we bought a foreclosure, so we bascially got the house on “sale” for 50% off lol.

    we will probably sell it within 10 years, and make a good profit off of it. so we weren’t totally concerned with the interest paid over the term of the loan (30 years).

    i don’t know much about finance, but I DO know that interest rates are rising… putting 10% down on a home now with a 3% interest rate, might not be bad compared to putting 20% down in 2 years with a 6% interest rate… just something to consider. i would check projections of rates and maybe calculate out the total cost of the loan in both situations. it might end up costing you the same, or one might be a better deal in the end.

    good luck!

    Post # 9
    Member
    920 posts
    Busy bee
    • Wedding: June 2015

    @turnanewleaf:  +1

    that’s what i said in my post as well… interest rates would pay a big part too. not just the down payment.

    Post # 10
    Member
    920 posts
    Busy bee
    • Wedding: June 2015

    also, like others mentioned, you can alway pay the loan off early in most cases, or even refinance later on, although you will incur some costs with that.

    Post # 11
    Member
    10494 posts
    Sugar Beekeeper
    • Wedding: January 2011

    What’s the area like where you are?  If you were in Toronto of Vancouver, I would say to wait because I don’t think housing prices are going to go up much more than inflation.  There is potential for inflation to actually be high.

    If housing prices are still recovering like in some areas of the US though, you might want to consider taking a look.

    Another thing to consider is interest rates.  They can’t be predicted, but I doubt they will stay as low as they are for years to come.  If you lock in long term, and can afford higher rates in the future it might be worthwhile to buy.

    Ultimately though, timing the market isn’t the main priority.  It’s to make sure you want the responsibilitie, can afford it, and are reasonably stable.

    It never hurts to at least start looking and getting some information!

    We did put down 20%.  We weren’t waiting to save that up though, we had actually hoped to wait until I had a job and decided to just go ahead on the one salary instead.

    Post # 12
    Member
    855 posts
    Busy bee
    • Wedding: December 2012

    @highschoolhoneys:  Exactly.  We decided we could make more of our money invest or save in other areas because of the low interest rates now rather than waiting and having the money likely go towards higher interest rates.

    Post # 13
    Member
    10494 posts
    Sugar Beekeeper
    • Wedding: January 2011

    @LittleCricket:  I thought in the US you don’t worry about rates increasing because most people go with a 30 year term?

    Post # 14
    Member
    1016 posts
    Bumble bee
    • Wedding: August 2014

    @highschoolhoneys:  Most of our friends will almost certainly lose their homes if interest rates rise above ohhhhh 1 or 2 points. They take as much as they can afford now, not realizing how even a few percentage points can drastically change their mortgage payments and in most cases make them completely unaffordable. I think even at 13% we would be okay. Not super happy, not ever eating steak for dinner (*cries*), no cable, but still able to pay our bills and take care of ourselves.

    Currently, my friend’s mortgage alone takes up 50% of her take home pay. I don’t know how she does it now and certainly don’t know how she would be able to absorb any additional costs in the future.

     

    Post # 15
    Member
    1275 posts
    Bumble bee
    • Wedding: September 2014

    We haven’t yet, but our goal is 25%.  I would really like to do 30-33% but we’ll see.  I think it’s feasible, considering we both work and have no debt.

    Post # 16
    Member
    1721 posts
    Bumble bee
    • Wedding: August 2010

    We put down just slightly over 20%. It got us a 2.25% rate which is fabulous! We were thrilled not to have pmi or a high mortgage monthly payment. By putting down the amount we did we will save over 50k in 7 years. 

    It really depends on your current situation and the market. You could buy now and then pay extra each month to get your principle now. Then lose your pmi in a year or two. 

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