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PrettyInPink
 
Home Buying/ Down payment

Basic question is: What % should you put for a down payment on a house?

I had always heard 20% and am saving like mad to try and get the 20% to buy a house in the next year or two. However, I have 3 people my age (25/26) who have bought houses and put anywhere from 5-9% down. This just seems like a bad financial idea to me. I know the housing market is a buyers market now but still. Thoughts?

By the way, a typical starter house in my area is around $300,000
Old 06-05-2011, 08:31 AM PrettyInPink is offline  
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U Caught The Gay
 
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20%

Ask them what kind of loan they got at 5-9% down. It's probably a shitty loan with a high monthly payment, high interest, and awful terms.

If you have 20% you have more leverage.
Old 06-05-2011, 08:33 AM U Caught The Gay is offline  
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Forever Domon
 
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PMI is killer, id recommend doing 20% if you can. However, i would not recommend taking out a second loan to cover your down payment. If you arent there yet, just keep saving.

Its more conservative, but in my opinion you have the right idea, the savings of not paying PMI will make up for the difference in percentage very quickly.
Old 06-05-2011, 08:35 AM Forever Domon is offline  
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Forever Domon
 
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Originally Posted by U Caught The Gay View Post
20%

Ask them what kind of loan they got at 5-9% down. It's probably a shitty loan with a high monthly payment, high interest, and awful terms.

If you have 20% you have more leverage.
these days, if you qualify, you can put down far less than 20, you'll just get stuck paying PMI, which is essentially a +1 point. So even if your rate is great around 4%, you'll be paying 5%
Old 06-05-2011, 08:36 AM Forever Domon is offline  
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Vendetta
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I'm certainly in the "prefer to rent" category and will be for a long time--but when I do eventually buy a house, it will be with 20%...if not more.
Old 06-05-2011, 08:59 AM Vendetta is offline  
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dbu8554
 
300k for a starter house? 40-80k out here in vegas
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Old 06-05-2011, 09:01 AM dbu8554 is offline  
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i want to go buy a house in vegas right now
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Old 06-05-2011, 09:08 AM mikeawesome is offline  
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PrettyInPink
 
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300k for a starter house? 40-80k out here in vegas

Yeah....Metro Boston area
Old 06-05-2011, 09:30 AM PrettyInPink is offline  
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Viremia
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Granted, I'm older than you and better established in my life, but I saved until I had 20%. Buying a house isn't something you do just to do it. It's a very serious investment.

And while rates may be low right now and home prices may be down, it isn't necessarily a great time to buy. Depending on where you intend to buy, it could be a great market or a really bad market. Many places in this country are still going through a double-dip housing recession. In short, prices are going to continue to fall and you could easily find yourself under water.

Just sayin'.
Old 06-05-2011, 10:17 AM Viremia is offline  
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Originally Posted by Viremia View Post
Granted, I'm older than you and better established in my life, but I saved until I had 20%. Buying a house isn't something you do just to do it. It's a very serious investment.

And while rates may be low right now and home prices may be down, it isn't necessarily a great time to buy. Depending on where you intend to buy, it could be a great market or a really bad market. Many places in this country are still going through a double-dip housing recession. In short, prices are going to continue to fall and you could easily find yourself under water.

Just sayin'.
A house isn't an investment >> http://patrick.net/housing/crash3.html

To the OP, read this: http://www.iwillteachyoutoberich.com/buying-a-house/
Old 06-05-2011, 10:36 AM U Caught The Gay is offline  
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Granted, I'm old

I agree

I would hate to be under over half the value and be paying ultra mega payments
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Old 06-05-2011, 12:18 PM tegandje is offline  
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Viremia
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99% of the time, a house is, not only an investment, but a good investment. Right now we (most of the country) are experiencing that 1%.
Old 06-05-2011, 01:00 PM Viremia is offline  
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99% of the time, a house is, not only an investment, but a good investment. Right now we (most of the country) are experiencing that 1%.
Old 06-05-2011, 02:46 PM U Caught The Gay is offline  
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Viremia
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that is an indefensible argument

you win
Old 06-05-2011, 03:27 PM Viremia is offline  
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BlisterDick
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Quote:
Originally Posted by PrettyInPink View Post
Basic question is: What % should you put for a down payment on a house?

I had always heard 20% and am saving like mad to try and get the 20% to buy a house in the next year or two. However, I have 3 people my age (25/26) who have bought houses and put anywhere from 5-9% down. This just seems like a bad financial idea to me. I know the housing market is a buyers market now but still. Thoughts?

By the way, a typical starter house in my area is around $300,000

It's 20%. However, if it's your first home you can get an FHA and will only have to put down as little as 3-5%
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Old 06-05-2011, 03:51 PM BlisterDick is offline  
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