Post # 62
I’m just trying to imagine a worls in which you can put down less than 10%. 10% is really the minimum here unless you’re on a shared equity scheme, and you only start getting decent rates at around 20%. 25% or more is the norm, as far as I know. Most of my home owning friends have put down 20-50%.
Post # 63
@bmo88: ABSOLUTELY wait and put more down. And until you have a good emergency fund in place… and have atleast the little debts you have (like credit cards) paid off. You are right to be worried about the overall payment. Poor ppl ask how much down and how much a month… rich ppl ask how much.
We didn’t wait and we just jumped in because we were sick of renting. But I wish we would have waited. Honestly its great to have a house but unless you have an emergency fund and can EASILY afford the additional expenses as well as the mortgage it can easily hurt you. You don’t want to get in the place where if the water heater goes out you have to put it on a credit card because you don’t have the 6k dollars it would cost to fix it. Houses are great and I want you to get a house but they expensive and they are a risk, so dont jump in until you are ready. I miss the days of just calling the maintenance department in the apartment to come out and fix or replace anything that goes wrong FOR FREE. Even just basic maintence of all the little things gets expensive. Not to mention taxes and insurance…. Ours went up 50 dollars a month in the last year.
Another thought… look at 15 year fixed rate mortgages… you’ll pay SIGNIFICANTLY less and you only pay a few hundred more a month. A 30 year loan will cost you sometimes double the price of the home. Its crazy.
Post # 64
We’re saving for a 20% downpayment on a house between $450,000-500,000. I would rather rent where we currently live for a couple of years (rent is affordable and everything is included so there are no fluctuating bills except cable and internet) and live poor so we can save the $100,000, than rush and get stuck with mortgage insurance, plus a higher monthly payment.
Post # 65
I would say a lot depends on the strength of the property market where you live.
I live in Australia, and generally the property market has been fairly strong. There were a couple of years with little growth, but now it seems house prices are starting to rise again. In a market like that, you wouldn’t want to wait 2 years while saving, if you can afford a 10% deposit now. Basically, by the time you save more money, the same houses will also be more expenses. You would have to be able to save faster than prices increase for that plan to make sense. Where you live, that could be a totally different market. In a falling market, it would certainly make sense to wait, because you’ll save more money and buy a house cheaper.
Ultimately, 10% is not a bad deposit so personally I would just go for it. My husband and I had more like 20% but that’s because he’d been saving for years but honestly, he would have made more money if he had just purchased a property sooner because of how much prices rose in the time he was saving.
That’s my perspective anyway, hope it helps.