Post # 107
- Wedding: May 2012 - El Faro Convention center, Aguadilla, Puerto Rico
We are hopefully closing on our first home in two weeks and we have put 3.5% down. A lower downpayment made total sense for our situation since intrest rates are super low (we locked in at 3.125%), we got a decent deal on the house (negotiated our house to $15,000 under asking which turned out to be $10,000 under appraised value) and my company pays for most of the closing cost (Aprox $7000) as part of my relocation if I buy a house within the first year.
It would have probably taken more 5 years for us to be able to save up for a 20% downpayment while also throwing money away on rent. Right now we are sent to finish paying PMI in 2019 and the total PMI we will pay will be $15,254 which is much less that the money we would have spent on rent in those 6 year. In our case I feel like we’re only going to be paying about half of our total PMI because of the money we’re saving on closing costs.
OP do what works for you because every situation is diffrent.
Post # 108
Zero down on both houses. PMI isn’t a big deal and I only have it on one house, sine the other house is a VA loan. Also, we don’t plan on keeping either forever because DH is military, so that helps.
Post # 109
I don’t think anyone is arguing that its the BEST thing to pay PMI, or to put less that 20% down. Every person on this thread I’m sure would have LOVED to save enough to put 100% down! Thats just not realistic for most people.
I put 5% down on my first house, which amounted to $7,500.00. With closing cost, I put about $12,500.00 into my first house in cash the day I purchased it. That was a big thing for me. I paid for my own school and vehicle, and have 3 months pay saved in case of emergency. I could have put that money towards the down payment and probably gotten close to 20%, but wanted emergency savings over lower total mortgage. Its not ideal, but in my opinion, its an excellent position to be in. My bottom line was managable payments. Even though the bank would have given me more, I stuck at a certain payment, and I was good to go. I pay extra on my mortgage when I can to get to that 20% mark so I can stop paying PMI, but that works for me at this time in my life.
Post # 110
Fiance and I will be looking to purchase a home after the wedding (about a year and 10 months), so we are trying to save as much as possible. My parents freak me out all of the time, claiming we need to put waaaaaay more than 20% down to be comfortable. At this point, a 20% down payment would be about 70k which IMO is insane. I’d guess we’re more likely to put 20-25k down. Also, on LI, property taxes are absolutely bat shit crazy…for very modest homes, the lowest I’ve seen is 7k a year. My parents and FI’s parents pay over 1k per month in property taxes. I’d hope to keep our mortage+interest+property taxes under 2k per month, which may be a pipe dream. :-/
Post # 111
When I bought my first house, I think I only paid $3500 out of pocket max for everything. I had some closing costs rolled in. So like 3% down and the rest was rolled in. I had PMI, bugt it was such a cheap home.
My H bought this house before he knew me and had 20% down.
Post # 112
@Subie: I don’t think anyone is arguing that its the BEST thing to pay PMI, or to put less that 20% down.
Actually, I’ve talked to finance people who argue you *shouldn’t* tie up all of your money in your house and that you can make more money investing elsewhere. So these people will put the minumum down in a house that they can (and de-leverage occasionally if they can) to use the cash in the stock market or for other investments. My DH is exploring right now whether we want to roll the money from the sale of the condo into stocks that pay dividends and using the dividends to pay off the mortgage on the house, instead of just using the cash. He thinks after a few years, the increase in stock dividends will make us better off than avoiding some interest, and at the end you have an increase in stock value as well. I don’t know enough about this method to know how I feel about it, so right now we’re just looking into it as one possible strategy. But last year I made 17.5% on my investments. If we were paying 3% on a mortgage – that’s a difference of 14.5%! (I realize investments/trading are not guaranteed, this is just an example.)
Post # 113
We could put anywhere from 3.5-7% down. Depends on several factors, really. We’re looking at a house that’s significantly less than what we’d get approved for, so even with taxes, insurance, and PMI, our monthly payment would be about what we pay in rent on our apartment (which only includes water and trash, which, in our area, would amount to around $45/mo total). We could never rent a house here–renting a house, even a small one, starts at $900 and includes no utilities. Our apartment is $605/mo to rent. That, plus an increase in income, would put us in a comfortable place to have our own home, get our bills paid, and make improvements to build equity.