Down payment

So as we approach getting ready to buy a house we are hearing so many mixed things about down payments and I just want to get more feedback! We have heard for example if you have 20k to put down only put down 10 and save the rest. Others have said put down a full 20% I have heard so many things! Just curious what the general population has done! In my mind I'm thinking we go for the 20%


Thanks :)

Re: Down payment

Putting down 20% helps you avoid paying PMI ( mortgage insurance) that saves you hundreds a month...
But if the 20% down is going to totally wipe you out then put down less as long as you can afford the mortgage and PMI. You should have some cushion incase of an emergency.
Also don't forget about closing costs! They are a killer!

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You always want some money in the bank for emergencies. I would also strive to put down 20% to avoid pmi. Our first house we put down a little over 20% to avoid pmi and then the day after we closed all of the toilets stopped working. Super fun times.

I would buy less than you are approved for, and keep some money in the bank. If you can't then to me you cannot afford the house and will be house poor. This is not a good situation to put yourself into.

Message edited 1/25/2015 5:50:43 PM.

Re: Down payment

We bought our house in 2005 so things have changed a lot with mortgages since then but at that time we actually put NOTHING down on our house. Not a single penny and we did NOT have any PMI. We just paid our closing costs.

We had/have a regular first mortgage and at the time and we had a HELOC for our 2nd mortgage............we've since refinanced the 2nd mortgage to get rid of the HELOC since the interest rate was adjustable.

If I were you, I'd probably put down 10-15% and save the rest. NO doubt that once you move in there are going to be unexpected issues that arise with the house OR improvements you're going to want to make so it's nice to have a little extra in the bank once the house is yours.

Good luck!

Down payment

We did not put down 20%. We were able to get a conventional loan with a lower down payment. The PMI stinks, but by the time we would have had 20% plus a nice chunk left over after dp and closing we could have been priced out of the market.

I'm glad we didn't blow every cent- our oil tank started leaking 2 weeks after we closed. Had it get it removed and converted to gas (which wasn't cheap). And, even though we were in a decent sized apartment and had lots of furniture, I wanted to buy some new stuff....decor, patio furniture, bbq, tvs, etc. We were able to buy lots of stuff and still have a decent (I use "decent" loosely!) amount left in savings.

If you can do 20% and still have a nice chunk left over, definitely do it. If not, there's nothing wrong with putting down less as long as you're ok with paying the PMI.

Down payment

We are putting down 5% and saving the rest for reserves/renovations. We don't want to put all our eggs in one basket and I feel more comfortable having a nice nest egg in the bank just in case anything happens...you never know.

The downside is that we have to pay PMI BUT with the house that we are leaning towards and doing renovations we figure we can refinance next year and should have the 20% equity and be able to get out of the PMI. That's our hope although we know not everything works out we prefer to buy a fixer upper at a great price and do the work ourselves.

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We're putting down 10%. That's the max we can do comfortably. We are paying PMI but we would rather take advantage of the interest rates available than wait another year or two.

Down payment

Depends on your individual situation. I wouldn't put 20% if it will you with no reserve. Also I heard PMI laws are changing and you will no longer be able to knock it off once you got hot 20% equity. Not sure if that is true but something to look into.

Down payment

Thank you everyone!!! If we put X amount down would do you feel that about 15k left over after down payment and closing would be comfortable?

ive heard Pmi laws are changing I have been doing my research but haven't found much yet and wasn't 100% sure what they were ill have to look more closely because that will change things!

Message edited 1/27/2015 8:16:29 PM.

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We put 20% down the first time and we will be putting the 20% down on the next house too.

The problem with putting less down is 2 things:

1. You will pay PMI and your PMI payments are for the life of the mortgage...so in essence you're paying an extra several hundred a month for 30 years. That's ALOT of extra money to be paying towards your mortgage that basically goes to nothing (your PMI payment does not go towards the interest or principal on the loan, so its essentially money out the window).

2. The less you put down, the more you're monthly mortgage will be. For us, we cant afford to sustain a $2600/month mortgage. So we choose to put more down up front so we have lets say a $2300/month mortgage payment.

We will not have much left over after closing costs and yes, that's a bit scary. But we have credit cards in the event of something going wrong in the house (unexpected repairs). I would rather have less money on the front side knowing that I wont be throwing away money to PMI for the next 30 years.

Message edited 2/5/2015 3:56:20 PM.

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dbl post

Message edited 2/5/2015 3:55:17 PM.

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We have an FHA mortgage from 2013 - our PMI falls off after 5 years or 20% equity, whichever comes first.

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I tell Everyone to try for 20% , PMI is something to avoid if you can.

Message edited 2/7/2015 8:24:56 PM.