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SJG23
LIF Infant
Member since 1/15 87 total posts
Name:
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Serious Question for Down Payment and Savings
Hello all,
Thank you for being patient with my learning disability. I have a serious question for everyone and would like to hear your thoughts on it.
So we will have 200k given to us as a gift, all by Jan 2017.
We will by this fall have 70k of that money, and 50k from an investment, and wedding money gifts for closing costs.
We currently have as far as savings that we continue to save and wont touch, 60k.
We have two options here.
We are targeting homes from 320-390k in East Northport with lower taxes (under 9k), preferably 6-7k (which we have found some homes that have been sold recently and are for sale that are on the Grid area of E. Northport and are sure they will be a few later this year). We also have looked into the El Section.
Our range for monthly mortgage with 120k down would be 1500 to 2100 range (lower end on the Grid, upper in El).
If we do that, we can have 220k plus in savings by 2017.
That's option 1. A starter home for ten years, a big savings.
Option #2.
Wait until 2017, put down 200k and have a forever type home, have 120k in savings.
So the options are:
By 2017 220k in savings (if put down 70 down with extra 50 from investment)
By 2017 120k in savings (if put down 200 down)
If we do buy sooner, we may buy a forever home in the El section and be paying 2100 a month.
Is it better to have the extra 100k over 30 years and having paid a far less down payment or is it better to put down 100k plus more and have less in bank?
I'm thinking less down payment, more savings. But I wanted everyones opinions on this.
Message edited 1/27/2015 7:50:39 PM.
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Posted 1/27/15 7:47 PM  |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Serious Question for Down Payment and Savings
Really. Only you can decide this. Please stop.
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| Posted 1/27/15 7:50 PM |
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bunnyluck
LIF Adult
Member since 1/14 3196 total posts
Name:
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Serious Question for Down Payment and Savings
My advice is to ask a qualified financial advisor rather than strangers on the internet.
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| Posted 1/27/15 7:54 PM |
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2BadSoSad
LIF Adult
Member since 8/12 6791 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Ask a financial advisor and please stop. You dont listen to any advice you get anyway unless it what you want to hear.
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| Posted 1/27/15 7:59 PM |
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SJG23
LIF Infant
Member since 1/15 87 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Posted by 2BadSoSad
Ask a financial advisor and please stop. You dont listen to any advice you get anyway unless it what you want to hear.
There's no need to talk to a financial advisor right now. I am looking for peoples opinions on what they would do or what they think about the two options. Obviously everyone has opinions!
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| Posted 1/27/15 8:04 PM |
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TheLucille2
Yayicanpickmyowntitle!
Member since 6/11 1058 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Posted by SJG23
Posted by 2BadSoSad
Ask a financial advisor and please stop. You dont listen to any advice you get anyway unless it what you want to hear.
There's no need to talk to a financial advisor right now.
Wrong. Coming from someone who has gone through this process FOUR TIMES it is absolutely the right time to talk to a professional.
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| Posted 1/27/15 8:32 PM |
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Re: Serious Question for Down Payment and Savings
I truly do feel that you should ask a financial adviser so that you can figure out what is best for yourself.
However, I, personally, would wait for the forever home. We bought a starter home, and I'm glad and grateful we have a house; however, I would also love to not have to eventually go through the process all over again. That is just me though.
Message edited 1/27/2015 8:42:32 PM.
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| Posted 1/27/15 8:42 PM |
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skew
LIF Adult
Member since 5/05 6794 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Your threads are all over the place and beginning to confuse me. I agree with the others in that you should consult with a mortgage broker and/or a financial advisor.
You need to leverage your money and IMO a down payment that high is not a financially wise decision.
PLEASE PLEASE PLEASE heed our advise and contact a professional (your choice of field  )
Message edited 1/27/2015 8:57:30 PM.
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| Posted 1/27/15 8:55 PM |
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SJG23
LIF Infant
Member since 1/15 87 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Posted by oldtimerocknroll
I truly do feel that you should ask a financial adviser so that you can figure out what is best for yourself.
However, I, personally, would wait for the forever home. We bought a starter home, and I'm glad and grateful we have a house; however, I would also love to not have to eventually go through the process all over again. That is just me though.
Thank you. First person to actually address my question with a valid opinion. Appreciate it.
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| Posted 1/27/15 8:57 PM |
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SJG23
LIF Infant
Member since 1/15 87 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Posted by skew
Your threads are all over the place and beginning to confuse me. I agree with the others in that you should consult with a mortgage broker and/or a financial advisor.
You need to leverage your money and IMO a down payment that high is not a financially wise decision.
PLEASE PLEASE PLEASE heed our advise and contact a professional (your choice of field).
I would think that yes, an 80k difference for a down payment is a few hundred a month. May go further in the long run to have more in savings, especially when starting a family.
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| Posted 1/27/15 8:58 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Serious Question for Down Payment and Savings
You posted on careers that you make $12.50 an hour. Is a $2100/mo mortgage payment affordable?
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| Posted 1/27/15 9:00 PM |
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2BadSoSad
LIF Adult
Member since 8/12 6791 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Honestly, Im beginning to think troll.
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| Posted 1/27/15 9:12 PM |
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LuckyStar
LIF Adult
Member since 7/14 7274 total posts
Name:
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Serious Question for Down Payment and Savings
You truly do need to speak with a financial advisor. 200k down and 120k left over is a LOT of money. There is no right or wrong answer to your question. A lot will depend on the house you choose- will you get a fixer upper? What if you find a house you love but you hate the kitchen? Well, you'll need a new kitchen! You CANNOT answer either of those questions now because you haven't found a house yet. Please do not answer these questions.
You cannot make decisions this far in advance. I get wanting to plan, but you are setting yourself up for failure with so many particulars. You have no idea what your mortgage will be- you don't know what rate you'll get, you don't know what the taxes will be, you don't know how much the house will be.
You really do need to stop driving yourself crazy. Everyone here has given you excellent advice, but you need to listen. Please, please listen to us!
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| Posted 1/27/15 9:16 PM |
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Re: Serious Question for Down Payment and Savings
I agree - if you are seriously contemplating buying (and not just screwing with all of us with your posts), you really need some professional advice.
It costs you nothing to consult with a mortgage loan officer -- I can recommend someone if you need a point in the right direction.
But there are many factors that may influence your decision. For example, there are different types of loans that you may or may not qualify for. If you can only qualify for an FHA loan, for example, you are paying pmi no matter what. So it may not be worth it to putdown more money. And when you are an entry level buyer, meaning you can only afford the least expensive homes in the areas you want to buy, you run the risk of rates going up if you wait two years. You may then not be able to afford anything in your desired area. But if you can only get a fixer upper, savings for repairs and renovations may be key.
But honestly, as a professional, I am skeptical of your ability to qualify for a loan based on what you've posted.
I think you are one of those who "don't know what you don't know." For example, have you considered the possibility that you may only qualify for FHA - no matter what the down payment - and therefore have to pay both upfront mortgage insurance premium (which may be tolled into your loan) and monthly pmi? I doubt you have factored that into your monthly payment estimates of $1700-2100... Online mortgage calculators can't factor that in bc it's based on a lot of individual factors. But a mortgage professional can fill in a lot of these blanks for you and perhaps raise issues you haven't even considered, but may be crucial!
If you are truly a serious and motivated buyer, do not waste your time with these types of message board posts. Assemble a team of trustworthy professionals -- a mortgage specialist, a realtor, an attorney -- who can guide you through based on your needs and circumstances. It makes all of the difference!
Message edited 1/27/2015 9:41:51 PM.
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| Posted 1/27/15 9:40 PM |
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SJG23
LIF Infant
Member since 1/15 87 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Posted by Century 21 Dallow - Christine Braun
I agree - if you are seriously contemplating buying (and not just screwing with all of us with your posts), you really need some professional advice.
It costs you nothing to consult with a mortgage loan officer -- I can recommend someone if you need a point in the right direction.
But there are many factors that may influence your decision. For example, there are different types of loans that you may or may not qualify for. If you can only qualify for an FHA loan, for example, you are paying pmi no matter what. So it may not be worth it to putdown more money. And when you are an entry level buyer, meaning you can only afford the least expensive homes in the areas you want to buy, you run the risk of rates going up if you wait two years. You may then not be able to afford anything in your desired area. But if you can only get a fixer upper, savings for repairs and renovations may be key.
But honestly, as a professional, I am skeptical of your ability to qualify for a loan based on what you've posted.
I think you are one of those who "don't know what you don't know." For example, have you considered the possibility that you may only qualify for FHA - no matter what the down payment - and therefore have to pay both upfront mortgage insurance premium (which may be tolled into your loan) and monthly pmi? I doubt you have factored that into your monthly payment estimates of $1700-2100... Online mortgage calculators can't factor that in bc it's based on a lot of individual factors. But a mortgage professional can fill in a lot of these blanks for you and perhaps raise issues you haven't even considered, but may be crucial!
If you are truly a serious and motivated buyer, do not waste your time with these types of message board posts. Assemble a team of trustworthy professionals -- a mortgage specialist, a realtor, an attorney -- who can guide you through based on your needs and circumstances. It makes all of the difference!
"I doubt you have factored that into your monthly payment estimates of $1700-2100.." meaning?
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| Posted 1/27/15 9:50 PM |
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Re: Serious Question for Down Payment and Savings
Posted by SJG23
Posted by Century 21 Dallow - Christine Braun
I agree - if you are seriously contemplating buying (and not just screwing with all of us with your posts), you really need some professional advice.
It costs you nothing to consult with a mortgage loan officer -- I can recommend someone if you need a point in the right direction.
But there are many factors that may influence your decision. For example, there are different types of loans that you may or may not qualify for. If you can only qualify for an FHA loan, for example, you are paying pmi no matter what. So it may not be worth it to putdown more money. And when you are an entry level buyer, meaning you can only afford the least expensive homes in the areas you want to buy, you run the risk of rates going up if you wait two years. You may then not be able to afford anything in your desired area. But if you can only get a fixer upper, savings for repairs and renovations may be key.
But honestly, as a professional, I am skeptical of your ability to qualify for a loan based on what you've posted.
I think you are one of those who "don't know what you don't know." For example, have you considered the possibility that you may only qualify for FHA - no matter what the down payment - and therefore have to pay both upfront mortgage insurance premium (which may be tolled into your loan) and monthly pmi? I doubt you have factored that into your monthly payment estimates of $1700-2100... Online mortgage calculators can't factor that in bc it's based on a lot of individual factors. But a mortgage professional can fill in a lot of these blanks for you and perhaps raise issues you haven't even considered, but may be crucial!
If you are truly a serious and motivated buyer, do not waste your time with these types of message board posts. Assemble a team of trustworthy professionals -- a mortgage specialist, a realtor, an attorney -- who can guide you through based on your needs and circumstances. It makes all of the difference!
"I doubt you have factored that into your monthly payment estimates of $1700-2100.." meaning?
I mean - how are you calculating this payment? Are you just figuring out what your mortgage amount would be, based on various down payment scenarios, and then putting the mortgage amount and an assumed rate into an online mortgage calculator? And then adding a per month amount for your property tax target.
If so, you are neglecting to factor in pmi, which will be a given if you have to get an FHA loan. Based on what you've posted, I think you might not be able to get a conventional loan, even with 20 percent or more down. If that's the case, pmi is a given, and will likely add at least a couple of hundred dollars to your monthly payment. You won't have to pay as much as someone with a lower down payment -- and if you can go conventional, you won'tt have to pay pmi at all with 20 percent down.
But my point is - these are things you won't know and we can't tell you. You need to talk to a mortgage professional.
There may be other things that could prevent you from buying sooner rather than later... Or things that need to be addressed before you can buy. Why not use this time to get your ducks in a row? And if they are, then you have peace of mind that you are good to go when you are ready to buy. But you are making assumptions that may not hold true when you actually have to get that mortgage. Why not find out the facts... Ratter than rely on your assumptions and hypotheticals, and the opinions of strangers on the internet (most of whom can only give you info gleaned from their experience, which may or may not be recent or relevant).
As I tell my clients, the financial piece is the most important thing to have a handle on before you start house hunting. You dint want go waste your time and energy pursuing houses that aren't going to be realistic options for you.
Message edited 1/27/2015 10:15:02 PM.
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| Posted 1/27/15 10:12 PM |
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skew
LIF Adult
Member since 5/05 6794 total posts
Name:
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Re: Serious Question for Down Payment and Savings
I don't mean to offend (being TOTALLY serious as all novices should educate themselves) you need to buy a mortgage 101 and investing for dummies book and familiarize yourself with these topics prior to posting any more questions and continuing the house hunting headache search.
When I said "you need to leverage your money" I was not referring to holding money in savings.
Message edited 1/27/2015 10:17:01 PM.
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| Posted 1/27/15 10:15 PM |
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Teach723
Have faith. Believe. Dream.
Member since 8/10 2356 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Forever home! Also I feel like 120k in savings is a lot after buying your first home. If you can have that much that's awesome, but I'm not sure you need that much. Everyone is different though.
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| Posted 1/28/15 12:36 AM |
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Kitten1929
LIF Adult
Member since 1/13 6040 total posts
Name:
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Re: Serious Question for Down Payment and Savings
In all seriousness, a combined income of $65k (and I'm assuming that's pre-tax) to purchase a home in the $400k range, regardless of down payment, sounds like it is cutting it really, really close, if at all possible.
Aside from mortgage, taxes, PMI and insurance - you have utilities like cable, oil and electric. Not to mention your everyday spending on groceries, cell, etc. Even if you're super frugal, those things cost money.
If by some miracle you found a house in your prized areas that meet all of your demands and achieve a $2k mortgage, that's $24k per year. Add in $150 per month for cable, $200 for electric, $1k plus for oil (I don't have oil so I don't know the rates), and you're looking at thousands more per year. Car payments, CC (which yes, we know, you pay off), and just general life spending will eat away your paycheck when it's that tight.
You're better off taking that fancy down payment and purchasing a less expensive house or coop or condo in cash, then bank your savings.
Message edited 1/28/2015 10:11:51 AM.
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| Posted 1/28/15 10:11 AM |
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Mrs&MrsK
i need sleep ;-)
Member since 2/14 2008 total posts
Name:
L
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Serious Question for Down Payment and Savings
i feel like a mortgage company would frown upon a high down payment and low income. Because, you arent' proving that you are "good" for the money. you are proving that your parents are. And they aren't on the mortgage.
I remember even back in 2006 when I bought-- and they were giving $$ Away to everyone-- they still looked into EVERY "gift" or large amount over $5k that appeared into my bank account over the previous 3 years. And they scrutinized it.
Also, all the numbers changed about 100x before closing. Everything from homeowners insurance backing out and having to find another one to tax $ changes and little bank changes.
Even now, year to year, my payments change every year. Under and over payment of escrow, etc. (homeowners ins & tax changes)
seriously, consult someone now. Especially because you dont seem to understand it yet based on your responses.
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| Posted 1/28/15 12:51 PM |
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JennZ
MY LIFE!!
Member since 8/05 25463 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Omg. Just save your money. You have 2 years...come back then with these questions. 
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| Posted 1/28/15 2:15 PM |
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SJG23
LIF Infant
Member since 1/15 87 total posts
Name:
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Re: Serious Question for Down Payment and Savings
Posted by Mrs&MrsK
i feel like a mortgage company would frown upon a high down payment and low income. Because, you arent' proving that you are "good" for the money. you are proving that your parents are. And they aren't on the mortgage.
I remember even back in 2006 when I bought-- and they were giving $$ Away to everyone-- they still looked into EVERY "gift" or large amount over $5k that appeared into my bank account over the previous 3 years. And they scrutinized it.
Also, all the numbers changed about 100x before closing. Everything from homeowners insurance backing out and having to find another one to tax $ changes and little bank changes.
Even now, year to year, my payments change every year. Under and over payment of escrow, etc. (homeowners ins & tax changes)
seriously, consult someone now. Especially because you dont seem to understand it yet based on your responses.
We actually would be putting half of parents money and half our savings into down payment, so I would believe that shows responsibility. Also, our credit is great. In the 700s and 800s and yes her's is mid 800s from having a credit card for the past seven years and never missing a payment and always paying it off in full.
And we did consult someone and they said we can definitely afford a 399 home at 10k taxes. As far as the rest, that will need to be worked out but yes we can afford 399. I spoke to a loan officer so everyone can calm down about that.
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| Posted 1/29/15 4:34 PM |
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