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Aseras
 
the minimum for a FHA loan is 3.5% plus closing costs.
Old 06-06-2011, 10:29 AM Aseras is offline  
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VanFanel
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I'll chime in since we are getting through the same exact process right now - buying a condo and not putting 20%.

Things to consider: Most banks will lend you money regardless of how much you put down; but the less you put - the higher your interest will be and so will your PMI. The relationship is exponential and does not follow any type of logic aside from the banks own logic.

For example: a loan for a 250K place with 5% was offered to us at 4.75% with ~$180 PMI. The P&I alone was about $1,200; add the PMI to it and mandatory property tax - that's easily an additional ~$500 (over here if your DP is lower than a specific value, which I don't recall, the property tax is tacked into your mortgage payment and is paid on your behalf by the lender).

All things considered it is not a bad APR, and some may even like the fact that tax is tacked on the payments so that you can expect. Of course the downside is that you have an additional $~150-200 that you would have to pay up because you did not have enough to pony up for the downpayment.

Now the other option which is really hit-or-miss is a HomePath loan. HomePath loans are usually given out on REO (bank owned) properties. First thing about REO properties you should know is that 90% of them suck donkey balls, 4% of them are okay but need some work and 1% is that hidden gem that somehow got skipped upon during the short-sale process and went into foreclosure (we so happened to hit that 1%).

HomePath loans allow you to have a DP as low as 3%, have no PMI and can even give you up to 3.5% cashback towards closing costs (which can be a substantial amount - but if its less than 3.5% of cost of property then the difference is not given to you); HomePath loans do not even require the property to be appraised which (a sub-value appraisal could be a deal killer). In our example - the loan terms are 5% for 30 years, no PMI, but the tax is still tacked on. That dropped our mortgage payment by $100 a month.

Some may go "zOMG you have to pay more principal and interest because of the higher APR!" Well sure, but... you can write off your interest off your taxes... can't quite do so when it comes to PMI.




Anyway - some food for thought from your resident GenMay Jew.

Oh and word of advise for FHA - fuck that shit. Forget it. If the property you are trying to buy is a part of an HOA (which 95% of the shit here is ), you have to ensure the property is FHA approved; if it is not you have to get it approved and that is nearly impossible due to strict FHA rules.

While FHA allows you to have a DP as low as 3.5%, you are not given any credit for closing costs, you till have the PMI to pay... and the rate is not that significantly lower (maybe half a point).
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Old 06-06-2011, 01:37 PM VanFanel is offline  
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afxacid
 
you should really have 20% for a home. that doesn't mean you actually have to put 20% down .. but after your down payment you need to make sure you have enough liquidity for emergency home repairs, and/or in case a spouse were to lose a job or income becomes unstable/etc.
Old 06-06-2011, 03:05 PM afxacid is offline  
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edplayer
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Quote:
Originally Posted by mikeawesome View Post
i want to go buy a house in vegas right now


Vegas is a shithole. Why do you think home prices are low there?
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Old 06-06-2011, 05:27 PM edplayer is offline  
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ytzombe
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I went in with 3.5% with an FHA and am paying a .5 point. Actually my rate is 4.75% fixed. For those who say anything less than 20% is shitty with unrealistic terms is simply false. I expect to have my loan paid off in 23 years instead of 30 and saving quite a bit in interest. If you can swing it, go for having half of your mortgage payment taken every 2 weeks.

Also I went with new construction over previously lived in, there wasn't much in wiggle room on the price, but there was room to negotiate on other terms. Also figure your closing costs to be about $10k in addition to your 20%, more if your house is over $350k. If you can, try and have the seller cover closing costs.
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Old 06-06-2011, 05:43 PM ytzombe is offline  
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ERL857
 
Having recently done it in the north east, it is a hellish process.

Definitely make sure you have that 20% to put down plus 10k+ for closing costs. Its a good time to get more house for your money and get as much house as you can.

If your up for some projects a cheaper home with 3 rooms that needs a little love will get you more than the 2 bedroom that needs less work down the road.
Old 06-09-2011, 08:06 PM ERL857 is offline  
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Thermo1223
 
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FHA loan, 5% APR and even with 3.5% down and the seller paying mostly for closing(which they damn well should) We still only needed less than $5,000 total to buy a $150,000 home.

Would I do it again if possible? Yes
Is 20% a better idea? Yes, but having over $30,000 liquid cash is not feasible for a lot of people and in my case I pay no more for my house than I used to pay in rent. In my case it worked out quite well.
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Old 06-11-2011, 10:57 PM Thermo1223 is offline  
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Vegas is a shithole. Why do you think home prices are low there?

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Old 06-12-2011, 10:03 PM Legend is offline  
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mikeawesome
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Quote:
Originally Posted by Thermo1223 View Post
FHA loan, 5% APR and even with 3.5% down and the seller paying mostly for closing(which they damn well should) We still only needed less than $5,000 total to buy a $150,000 home.

Would I do it again if possible? Yes
Is 20% a better idea? Yes, but having over $30,000 liquid cash is not feasible for a lot of people and in my case I pay no more for my house than I used to pay in rent. In my case it worked out quite well.

how much are you paying a month?
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Old 06-12-2011, 10:16 PM mikeawesome is offline  
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Thermo1223
 
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how much are you paying a month?

$1200ish, 800 for p&i and rest for ridiculous taxes.

Our rent in a upscale 2 bedroom was $1200, we were honestly trying to find a house for below $1000 a month but they were all shitholes.
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Old 06-13-2011, 06:21 AM Thermo1223 is offline  
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