Im looking to buy a house in Bergen County. I hear alot of things about being an first time buyer, What is the ideal percentage to put down on a house and what is the average of intreset most people pay.
2006-07-27 04:36:50 · 8 answers · asked by Harlem 2 in Business & Finance ➔ Renting & Real Estate
#1 Educate yourself on your market of interest, visit open houses, review MLS listings, go to For Sale By Owner open houses. The knowledge of your market you internalize, will help you when determining a fair and adequate offer for a property that you become seriously interested in.
#2 Get pre-approved (pre-qualified at the minimum) and find out how much you can afford! This could actually be considered step number one.
The "ideal" Down Payment...that really depends on your specific financial situation. With proper credit, employment, etc... you can obtain 100% financing on one loan, 100% financing on a split loan i.e. (80% / 20% for instance), so if you are restricted as to how much you can spend on a down payment, then the answer might be your "ideal" down payment is ZERO.
If you have cash for down payment, then 3%, 5%, 10%, or 20% are common amounts I see others making.
The Average Interest Most people pay is a very difficult question to answer and depends on if you are doing 100% financing, your credit scores, amount of loan, the index that your particular loans interest rate runs off of, if your getting a single loan or a split loan in which case you'd be looking at and for what your 'blended rate' would be, etc... It really is based upon your individual needs and situation.
I would suggest you find a professional mortgage planner that can assess your situation, and shop your needs around to multiple lenders to find you the best rates and programs available for you to choose from.
2006-07-27 05:34:36 · answer #1 · answered by ReggieWjr1 4 · 0⤊ 0⤋
There are a lot of myths about mortgages that are no longer valid. First off, you want to qualify for the best terms available. That may not mean the lowest interest rates. You want the smallest payment amount with the biggest tax advantages and you don't ever want to pay off the mortgage early or utilize funds that you could otherwise invest to pay down a mortgage. Why is that?
With a 7% mortgage, the actual APR is more like 4.5%-5% when you factor in the tax deduction. If you utilize all available funds you have available to pay on a mortgage, you are only creating paper wealth in the form of equity. If you were to utilize those funds in an investment account earning 8% or more, you are offsetting the mortgage interest and saving for the future at the same time. Your mortgage is also building equity regardless of whether you are paying the mortgage down.
As far as the down payment is concerned, if you can afford the 20% which would allow you to avoid the PMI, then that would be ideal. If you can't then again, you would want to put down the least amount needed then invest the rest.
The first time buyer programs generally offer lower down payments, slightly lower interest rates and lower LTV and Debt ratios. They will hit you with PMI and have other restrictions though like staying in the property for three years or more, etc.
2006-07-27 13:53:23 · answer #2 · answered by Sam B 4 · 0⤊ 0⤋
Ideally, you should put down 20% and finance the other 80%. Depending on your credit, you could get 100% financing if you wanted to but you will usually have to pay Private Mortgage Insurance (PMI) which is an extra monthly expense. Interest rates are in the low to mid 7's for good credit, possibly less with the 20% down.
2006-07-27 12:33:06 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Hi I work with Chartermark a first bank mortgage co, I think their is great pragrams out their,but it hard to qualify for them becouse of the different criteria. I think when you are a first time home buyer should ask your self, how long are u staying in the house? how much do you want pay monthly?Is it a good investment?
Just to let you know theirs 100s programs that are base on your credit that best fits for you.
Let me know if you any help
wilson@cmfg-usa.com
www.chartermarkmoney.com
2006-07-27 16:19:32 · answer #4 · answered by Wilson V 1 · 0⤊ 0⤋
You can easily buy a house with nothing down. Interest rate you could expect to pay is about 8-10% about now. The interest will be amortized into your payments. Just buy.
2006-07-27 11:43:05 · answer #5 · answered by Christopher D 2 · 0⤊ 0⤋
If you can put down 20%, you won't have to pay title insurance. Other than that, it's a matter of preference. Try bankrate.com for the latest mortgage rates.
2006-07-27 11:40:45 · answer #6 · answered by rainfingers 4 · 0⤊ 0⤋
ASk your realtor about a CDA loan. Its for 1st time buyers and I got mine at 5% and you will probably need less than 3g down.
2006-07-27 11:42:10 · answer #7 · answered by Anonymous · 0⤊ 0⤋
I only want to say this....
they will mess with you bad!!! they will tell you the house has other bidders,a nd so on.
be very careful.
2006-07-27 11:40:44 · answer #8 · answered by Me 4 · 0⤊ 0⤋