What is a good down payment for a house?

Discussion in 'The Okie Corral' started by greatwun, Dec 17, 2012.

  1. greatwun

    greatwun Senior Member

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    Percentage wise? For 650,750,850 credit scores. I'm years away from buying my first house but I figure I'd start looking into it now. Just wondering if you guys can offer any info.


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  2. magpie maniac

    magpie maniac

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    To avoid paying private mortgage insurance, you'd need to put down at least 20% of the appraised value or sale price.
     

  3. dherloc

    dherloc X-Nuc

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    This is a very good number.

    Will cost you far less in the end if you don't have to pay PMI.
     
  4. magpie maniac

    magpie maniac

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    I should add that your FICO score will affect your price and availability of credit. Nowadays, a 650 won't get you very far at all unless you're bringing a lot of money to closing. The best deals are for people with scores of 785 and above.
     
  5. XDRoX

    XDRoX

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    20% to avoid PMI and 30% down to get the best interest rates available. And a 650 credit score will definitely hurt your chances of getting the best rates. You'll need to get that up.
     
  6. Gallium

    Gallium CLM

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    The 1st metric is to buy a house you can afford. If two people are buying the house, it would be ideal if one person's salary can "float" all of the bare bottom expenses for both of you (including the house note).

    As was said, 20% is a good minimum place to start.


    One of my regrets with my last purchase was not following my gut and moving to TN or GA. For what I paid down (20%), I could have paid 50% of a house in either of those two states, and not have to deal with 5-figure property/school taxes.
     
  7. Z71bill

    Z71bill

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    I just helped my daughter get a mortgage & buy a house.

    She had 20% down -

    I had her check and see if a larger down payment would help her get a lower rate -

    It was something like this -

    10% 4.4%
    15% 4.2%
    20% 3.9
    25% 3.7%
    30% 3.7%
    50% 3.7%

    I assume credit also matters - this was her first loan of any kind - except a CC that was paid off every month.

    She scrapped up an additional 5% to get the lower rate. It dropped her payment ~~$70 - combo of lower loan & rate.

    But will take 12 years to really be even on a pure cash basis - extra down / monthly savings - 140 something months.

    This was at a credit union - but doubt it matters.
     
    Last edited: Dec 17, 2012
  8. devildog2067

    devildog2067

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    Not necessarily true. I bought a home with zero down and did not have to pay PMI.
     
  9. devildog2067

    devildog2067

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    Depends on the house, on your budget, and your projected future earnings.

    20% is a good rule of thumb number though.
     
  10. Gallium

    Gallium CLM

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    Yes, but the exception does not invalidate the norm, and the norm is you pay PMI. We are preparing him for the norm. :)


    Say, how was it you did not pay PMI. My mom also did not pay PMI, and got a 4% interest rate (years ago when the rate was over 6%). She was a 1st time buyer, put 5% down, etc.

    - G
     
  11. devildog2067

    devildog2067

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    Told them I didn't want to, and if they didn't get it waived I'd go find another mortgage lender. This was during the swinging boom years, but still... lots of things are negotiable that people don't realize.
     
  12. dherloc

    dherloc X-Nuc

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    VA loan is no PMI also...or it was when I did one 12 years ago.
     
  13. kensb2

    kensb2 pistol n00b

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    That is still the case, and no down payment required.
     
  14. Viper16

    Viper16

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    Okay, so I have PMI on mine...when can I get that taken off or does it automatically come off after so many years?
     
  15. NDcent

    NDcent Socially Inept

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    20% down and 15 years.

    For a young person/couple with a first time home owner, 10% down with 4% or under interest, you could push it out to 20 years.

    Look at housing and vehicles the same. It's not how much payment you can afford, it's how much product you can afford. A slick talking salesperson will have you financed low enough and long enough to afford/pay twice what it's worth.
     
  16. Gallium

    Gallium CLM

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    When you have paid in >20% of the total price on the house. They are not going to voluntarily tell you this (not sure if they are required by law). I was not told on a previous mortgage. I made em remove it.
     
  17. Z71bill

    Z71bill

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    IIRC at 20% you also don't have to use an escrow for tax & insurance.

    But still not a bad thing to use an escrow if it helps your budget.

    :dunno:

    But you will lose out on income you could have earned if you day traded money instead of paying them early.
     
  18. sheriff733

    sheriff733 NRA LIFE MEMBER

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    Enough to make the monthly payment no more than 25% of your monthly income.

    Also, never finance for more than 15 years. Never.

    You'll thank me later.
     
  19. aircarver

    aircarver Descent Terminated Silver Member

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    :thumbsup:

    Over 15 years, it's all rent ....

    .
     
  20. sheriff733

    sheriff733 NRA LIFE MEMBER

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    Yep. You'll pay for the house twice over.

    The bank sure appreciates it, however.