I am buying a 63,000.00 house. How much do i put down?

Question

I have about 25,000.00 dollars saved up should I wipe out my savings to give a really good down payment, or should I just give a smaller down payment and save the rest for emergencies...? I am not sure if i am going to lease or live there...i live at home but am sick of living at home i am 25, and have no privacy..If I stay at home though I can lease the home and save lots of money? Any advice or suggestions?

Answer 1

If you put 12,500 down ,that is about 20%. Save the rest for emergencies or home repairs.
It's up to you if you would move in or stay at home, even though it's cheaper to live at home you could be independent.

Answer 2

My advice is to put down at least $12,600. That is 20% down. Save the remainder for closing costs and possible repairs. Also, don't be afraid to ask a realtor for a 6% seller assist. If the realtor refuses to place a bid for you go out and find another realtor.

The lender will want to see if you have 2 months of Principle, Interest, taxes and Insurance in your bank account. How is your credit? Do you know what scores you have? Have you been pre-approved for a mortgage before looking for a home? How long have you been in your job? If it is less than 2 years where you in school for the profession you are working at?

I would live in the property for a year then refinance the property and take some equity out and purchase another property. Rent out the first property while living in the new property. This will give you a mortgage payment track record. Your credit score will go up and put you into a new category. Just pay your bills on time and don't cancel any credit cards except the ones that are a finance company. If they aren't an actual bank like VISA, Mastercard, AMEX, or Discover then your scores will be lower. Also, if you have a car loan make sure it is an actual bank as well.

Good luck.

Answer 3

A 20% down payment *is* really good ~ and only half of your savings. This will keep you from having to pay 'PMI' mortgage insurance every month, which lenders require for people with more that 80% LTV (Loan to Value). Also, 20% down should get you the best interest rate. Check with your lender, 25% might get you an even lower rate, but beyond that the advantage will likely be maxed out.

Another thing to consider is the size of your payment. A smaller loan amount will make for a smaller payment, of course. You must be very confident that you will have a budget you can live with -- don't forget to include property tax, property insurance, and utilities!

Renting out the house will affect the terms of your loan. A mortgage for non-owner occupied property will probably have more restrictions and a higher rate. Your property insurance will also be higher, and you are faced with the risk of paying the mortgage for the months you are ever without a tenant. Depending on the size of the home, have you considered living there and taking in a roommate? Moving out will not only increase your own privacy, but would be much appreciated by those who have raised you and would like to consider their job complete. (Successfully completed I would say, based on the size of your nest egg at least.)

Personally, I believe real estate is the best way to gain wealth, so you're definitely on the right path. Good luck!

Answer 4

Unfortunately for you, every ones wrong :( For a 63K home, put nothing down. Period. I am Real Estate investor, a licensed financial adviser, and an investment banker. Keep your 25K in assets and invest them otherwise. There are a number of ways you can safely net 12-18% APR and offset the second loan you would be receiving from a 100% financing. And as far as PMI concerns, I cant remember the last bank I dealt with that had PMI, or, Property Mortgage Insurance. You have sooooo many options now and at your age should be purchasing properties left and right at a 100%. Ask any REAL financial advisor and they will tell you the same thing. Leverage is key, and cash is gold. That cash you have could earn you close to $5000/Year and even compound!!! Get the cheapest, interest only, 100% financing you can and do it over and over again. If you need my free advice, I am always looking for people to mentor. I can offer you 1 hour of phone time a week, my knowledge is priceless, my time is free. Contact me for more information. [e-mail]

Answer 5

YES
put 20% down payment to eliminate the extra cost of PMI ( this can be $200 per month savings)
that is only about $13,000 of your savings
put the rest into a high interest but liquid fund at a good bank
(4.5% is possible) as a fund for contingencies.
( vacancies, repairs, assessments, insurance increases etc)
Live in the house and sublet a room or two to somebody who will respect your privacy ( because you are the owner landlord and make the rules) Then you can qualify for the owner occupant tax exemption and be there to rule over the tenant(s)

keep it at least 2 years as an occupant and then you can sell it tax free and do it again every 2 years, or rent it out entirely or perhaps borrow against it to buy another home if the market is good. keep repeating this process until you own 10 homes in 20 years and you will probably be rich my friend and can retire or get richer. it is that simple. ten years to wealth.

Answer 6

Either way keep back a couple thousand for emergency's or upkeep on the house. Put the rest down on it so you pay less interest. Have you thought about living in the house and renting rooms to your friends? Now don't feel bad, but you need to charge them more than you pay! Say your payments are $800 a month. Have each renter pay $400 a month. You will have to pay the taxes every year. Or have them each pay $300. It's your house and you are responsible for it, this is business. They get a good deal on rent and you have them making most of your payments! Whatever you decide, good luck!

Answer 7

I would put 20% down. If you don't want to live there, rent it out for a year. If you live there, fix it the way you want, you will have enough for furniture and enjoy having your own place to reside. For the money you will have left, put some in a money market account so that it gains interest for you, put some in a CD account for a short term gain, and have the rest in a savings account for emergencies. Therefore, you are comfortable all the way around.

Answer 8

Let the bank tell you what kind of down payment you will need or the real estate agent. Never give everything you have for the house. Try giving 5K and then they will let you know if you need more. Most banks only want 20% down but if you want to drive down your mortgage payment then you could put down a little more. This will mean that you will put down a little over 12K if they do require that you put down the 20%.

Answer 9

Find out how much you can put down to get a mortgage that you can afford. Put some back for repairs and emergencies. Then take the rest and put in a retirement account. Check out this website. Clark Howard knows his business and won't stear you wrong. Good luck and congratulations.

http://clarkhoward.com/shownotes/category/7/13/217/

Answer 10

Ask your bank. The more you put down the lower your payments will be. It always good to have a rainy day fund though. Most people say it's good to have three months of expenses in the bank if possible.