20% downpayment on a new house

[ParamedicMXr]

Just curious as to who all here has put down at least 20% of a downpayment on a house. We are looking to buy soon and are having arguments on how much of a down payment we should put. I am all about doing 20% but the misses thinks its better to put less and deal with the mortgage insurance. She also thinks it wont affect the interest rate.

And FYI the house we are looking at is going to be $300k, so $60k down which we could do, but wouldnt leave much of a buffer should something happen.

 

[stangposse]

Your wife couldn't be more wrong. Put at least 20% down...do whatever it takes to stay away from PMI. Huge waste of money.

Build your reserves, diligently, after you close.

 

[Svtkidd23]

I got a USDA RURAL DEVELOPMENT loan
0% down

 

[97LaserRed]

Your wife couldn't be more wrong. Put at least 20% down...do whatever it takes to stay away from PMI. Huge waste of money.

Build your reserves, diligently, after you close.

Exactly!

 

[ford fanatic]

My wife and I (before we were together) both had houses built in 06, we both paid the 20%. My first two houses I didn't because I just didn't have the cash, if you have it, put it down.

 

[rotor_powerd]

A note on PMI-

This is the way it is with FHA loans, not sure about conventional. PMI is on the loan for 5 years or until 20% of THE ORIGINAL LOAN AMOUNT is paid, whichever is longer. That means that you could put down $59,000 on that house, but still be stuck with PMI until you pay 20% of the remaining $241,000.

I would put down 20% if it isn't going to completely wipe out your savings. We have been in our house for almost a year, and I can tell you from personal experience that house stuff isn't cheap when it breaks. If you can't put down 20% comfortably, then put down the least amount required, and work on accelerating your payments to get rid of the PMI as soon as possible.

FWIW, PMI on our $260,000 FHA loan is about $230/mo. That adds up to a nice chunk of change. The circumstances for buying this house opened up and we jumped on it when we didn't have 20% to put down comfortably, so we are stuck with it for a while. We did get a 3.25% rate though, so not all bad.

 

[thomas91169]

Do $50k then and keep $10k for just in case

 

[BlownAway03]

I got a USDA RURAL DEVELOPMENT loan
0% down

Me too. Plus USDA has no pmi. I know it's not available in all areas but its a nice little loan. I did get it before I got a better job and got married though. I wouldn't even qualify now because of our income. Obama even threw in an extra $8000.

 

[Svtkidd23]

Me too. Plus USDA has no pmi. I know it's not available in all areas but its a nice little loan. I did get it before I got a better job and got married though. I wouldn't even qualify now because of our income. Obama even threw in an extra $8000.

Yeah i cant now. Lol i wish

 

[Dizzyscure1]

20% down period, don't buy until u can put that down and you have a nice cushion for emergencies such as roof or plumbing. $15-20k saved set aside for ur house would be a great bet as most likely nothing will happen but its always best to be prepared for those situations. Also remember this, who picks up the slack if someone gets disabled or dies?

 

[CobRoush-00]

A note on PMI-

This is the way it is with FHA loans, not sure about conventional. PMI is on the loan for 5 years or until 20% of THE ORIGINAL LOAN AMOUNT is paid, whichever is longer. That means that you could put down $59,000 on that house, but still be stuck with PMI until you pay 20% of the remaining $241,000.

On FHA loans, PMI will now stay through the life of the loan. I believe that started June 3, 2013.

 

[gmtech]

On FHA loans, PMI will now stay through the life of the loan. I believe that started June 3, 2013.

Yep, ask me how I know

 

[rotor_powerd]

On FHA loans, PMI will now stay through the life of the loan. I believe that started June 3, 2013.

I believe that's only for a small percentage of loans. Could be wrong though. Glad I'm not stuck with that though.

 

[BlownAway03]

I believe that's only for a small percentage of loans. Could be wrong though. Glad I'm not stuck with that though.

I think that's for the majority of the FHA loans. Just another example of the man holding us down.

 

[PSUCOBRA96]

We just did 10%, one because the houses we were looking at needed work so we needed money now. Don't forget you have to come up with closing costs and ours was about 14k. So we save about another 4.5% that was originally for a down payment for a house renovation.

We also got a conventional loan so it is likely we will be able to get out of PMI about two years into the loan when we have everything reappraised with the new improvements. When I say new improvements I mean total gutting except a few walls. New floors, electric, plumbing, kitchen and an added master bath that never existed. It depends what your situation is and what you are buying.

 

[flyby763]

Check your local credit unions etc. A lot of them have loans with less than 20% down and no pmi. I did 10% down and have no pmi @ 3.75%.

 

[Drilldo]

PMI is just throwing money down the drain. I would never want to pay it.

Pay twenty percent down and if you can't do that buy something cheaper.

More expensive houses are not always better. When we bought our house it cost around 1/4 of what the bank approved us for. We love the place, don't want more, and it is paid off now. An added plus of not buying a bigger place is property taxes and pretty much everything else associated with owning a house is cheaper.

 

[RDJ]

I think that's for the majority of the FHA loans. Just another example of the man holding us down.

untrue

Many FHA Loans Now Require Mortgage Insurance for Life | The Truth About Mortgage.com

only homes that have LTV of 90% or above

 

[PDubs]

PMI is just throwing money down the drain.

Truth.

 

[badws6ta]

I got away with no PMI 5 years ago when I bought my house. I went through USAA though. 0% down; looking back I wish I had put some down, at least 10%. I am making 2 extra payments a year though trying to pay it down.