My husband and I are looking to move within the next year. We will be first time home buyers. I was just wanting to know if we would have to put 20% down? Or if we'd be able to put less down. My husband has good credit. Mine is probably a little lower. My husband has a good work history. We are looking to buy a house that needs minor work...Okay...well any help is appreciated...
2007-08-27 05:52:23 · 13 answers · asked by Anonymous in Cars & Transportation ➔ Buying & Selling
We live in Wichita, Kansas...and plan to buy here also!
2007-08-27 06:02:58 · update #1
conventional mortgages usually require a 20% down payment, but theirs other types of mortgages like , VA requires no down payment, FHA has programs for as little as 3% down payment, you need to go to your bank or saving and loan and discussed this with a loan officer for all your options
2007-08-27 06:44:12 · answer #1 · answered by willliam d 2 · 6⤊ 1⤋
There is no really typical amount for a downpayment. Some put down nothing and some pay full cash.
Since you are planning on buying a home shortly, it would be better to buy the home first and use that money for the down payment for the house. The more on the house the less that you will pay in interest. Find an amortization chart and look at the difference in the total that you'll pay in principle and interest with different amounts of down payments. Your credit score will be higher and may help you get a lower interst rate on the house. Just hang on to the cars you have now, if you can, until after you get the house.
good luck.
2007-08-27 06:05:34 · answer #2 · answered by Fordman 7 · 0⤊ 0⤋
A typical down payment is 20% of the final value of the home. However, mortgage companies do allow for less than 20% down if you have a good credit history but they also tack on a PMI which can cost you anywhere from $30 - $60 month. Watch out for these though because they tell you that they can take it off when you reach 20% equity in your home, but the only way that I know of that works to remove the PMI is to re-finance your home and pay off that mortgage to start another.
2007-08-27 15:56:19 · answer #3 · answered by Evil One 1 · 0⤊ 1⤋
Most people will quote 20% as being the average for a first time down payment. If you go below this, you may be dealing with subprime lenders and insured mortgages, which means you will pay more in interest and various fees that the banker or broker will try to justify for the 'risk'.
I would think that it's tempting to go for a low down payment, but the bankers don't want you to know that it will cost you a small fortune more over the long term to finance. When and if I can ever afford a home, I'm going to try and buy one outright (that's not a typo) to avoid a mortgage. My advice would be to go with a small starter home or mini home. Pay the mortgage as quickly as you can then move up to a larger home down the road. Otherwise, you will be one of those folks that Jim Cramer has been ranting about on the tube recently (beware of the prime lenders!).
2007-08-27 13:11:30 · answer #4 · answered by Bruce Almighty 4 · 1⤊ 2⤋
Years ago all Financial Advisors, etc. used to say no less than 20 % down. The sub-prime lenders who created the mess we're in now let people without good credit, people with no savings, etc. buy homes with very little down. They're the people having foreclosurers now & losing their homes. Actually, the more you put down, the more equity you'll have in your home & the less your monthly payment will be
2007-08-27 18:37:20 · answer #5 · answered by msnoose 6 · 0⤊ 0⤋
Well, to begin with, if I wanted information about financing a house, I don't think I would ask in Cars and Transportation, Buying and Selling.
But to answer the question, it depends on how much the house will appraise for. Banks will typically loan 80% of the appraisal, not the asking price.
It they are asking $100,000 and the appraisal is only $78,000, 80% of that would be $62,400, so you would have to have a $37,600 down payment. Although in reality you wouldn't even bid that with that much difference between the prices.
But assuming they are asking at or near the appraisal price, 20% is common.
I found one last year that was being sold for way under the appraisal, and paid zero down, but that's a rare find.
2007-08-27 06:01:08 · answer #6 · answered by oklatom 7 · 3⤊ 2⤋
20% is suggested, you can find the lenders that you can put as little as 5K down. This makes a higher payment but if you have the 20% it makes things easier...
Go find a lender in your area and get pre-approved for a certain dollar amount that make the home shopping easier on you and the realtor. That way you are looking in the range you know you can buy.
2007-08-27 05:58:19 · answer #7 · answered by Uncle Red 6 · 0⤊ 1⤋
there is no set "minimum" for a down payment. Depending on the loan you get you could end up with a 100% loan, and only have to come up with the closing costs. Shop around to a couple different mortgage brokers, and don't settle for anyhtign that you are not happy with. Remember that EVERYTHING in negoiatable in Real Estate.
2007-08-27 05:57:41 · answer #8 · answered by zxangy300 3 · 0⤊ 1⤋
Depending on where you are buying sometimes you can put down 10% or less. State your living or moving too?
We just purchased a home and we put down only 1%.
Good luck and if you need a home in Arkansas...I have one for sale. lol
2007-08-27 06:00:42 · answer #9 · answered by okiemom67 3 · 0⤊ 1⤋
Usually 10-20%. Depending on how much the house costs, you might want to put more downpayments, otherwise your mortgage will be very high each month.
2007-08-27 18:49:17 · answer #10 · answered by pgsl 5 · 0⤊ 2⤋