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Old 06-28-2012, 03:27 PM
 
Location: The Triad (NC)
28,494 posts, read 62,136,122 times
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Quote:
Originally Posted by Rollingon View Post
(This is not a debate for buying v/s renting)
Unfortunately though... your question is entirely about whether to buy or not (rent).
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Old 06-28-2012, 03:32 PM
 
Location: Charlotte
228 posts, read 186,853 times
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Quote:
Originally Posted by Native_Son View Post
If you can get a loan with 5% down, do it. Especially if you can realize higher returns elsewhere (where *is* that higher return, btw).

How many lenders will issue a loan with 5% down, that's my question? With interest rates at such historical lows, banks are not really motivated to give their money away.
I recently bought my 1st place. A condo.

When I started the process I was talking to 3 different lenders. 2 of them offered 5% down conventional loans on houses and 10% down conventionals on condos. (I think CMCU and Bank of NC). Wells Fargo had a 10% down on houses I believe.

Of course all still offered FHA (3.5%) but then you are paying an extra $100-$250/mth for mortgage insurance for the 1st 5 years or ~20% of the loan.
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Old 06-28-2012, 03:44 PM
 
5,885 posts, read 7,741,016 times
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Quote:
Originally Posted by MrRational View Post
Unfortunately though... your question is entirely about whether to buy or not (rent).
But since he/she has enough money for the 20% then it at least seems like they can afford to buy.

I don't agree with those that say "NEVER BUY A HOUSE WITHOUT 20% DOWN," but if you are fortunate enough to have the 20% , I would put down the 20%, as was already mentioned mainly because of the PMI/MIP you'd have to pay without it. Yes there are ways to get around it (LPMI or 80/15/5) but putting down the full 20% will get you the best rate and the lowest payments.

And even if you don't put down the full 20%, if you invest it in something else I would put it in something where you'd be able to get the cash back quickly in case you need to sell the house and need it for closing costs.
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Old 06-28-2012, 03:47 PM
 
5,885 posts, read 7,741,016 times
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Quote:
Originally Posted by CharlottePirate05 View Post
I recently bought my 1st place. A condo.

When I started the process I was talking to 3 different lenders. 2 of them offered 5% down conventional loans on houses and 10% down conventionals on condos. (I think CMCU and Bank of NC). Wells Fargo had a 10% down on houses I believe.

Of course all still offered FHA (3.5%) but then you are paying an extra $100-$250/mth for mortgage insurance for the 1st 5 years or ~20% of the loan.
Don't you still have PMI though? No it is not as high as FHA's MIP but the FHA interest rate was lower when I was looking.
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Old 06-28-2012, 03:54 PM
 
Location: Charlotte
228 posts, read 186,853 times
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Quote:
Originally Posted by GoPhils View Post
Don't you still have PMI though? No it is not as high as FHA's MIP but the FHA interest rate was lower when I was looking.
Not sure actually, I think you're right though.

I went with FHA and got 3.875% (closed on 4/30). I could have put more down but probably not 20%. Finding a good complex that was FHA approved in the area I wanted was tough but I found one off Queens and love it.
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Old 06-28-2012, 04:59 PM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,670,466 times
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If you are going to put more down, make sure you have a sufficient emergency fund. Many people become flat broke after their down payment which can add a ton of stress.....
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Old 06-28-2012, 05:57 PM
 
Location: Up above the world so high!
45,269 posts, read 88,525,786 times
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Unless your credit scores are pretty stellar, or you are someone who qualifies for an FHA loan, it can be pretty hard to find a lender NOT requiring 20% down these days.

We like the idea of no PMI, so we go 20% down.
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Old 06-28-2012, 06:34 PM
 
1,163 posts, read 1,963,689 times
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Quote:
Originally Posted by CouponJack View Post
If you are going to put more down, make sure you have a sufficient emergency fund. Many people become flat broke after their down payment which can add a ton of stress.....
I second this. I don't know your financial situation, so it is hard to make a definitive call.

If the 20% down payment will allow you to keep at least 6 months of living expenses on hand and you are confident in the stability of your employment, then put 20% down.

If you won't have much left over after the down payment or if you aren't fairly confident about the stability of your job, put down less. It makes little sense to make a big down payment only to have major financial problems later which additional savings would have allowed you to avoid.
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Old 06-28-2012, 06:58 PM
 
8,402 posts, read 20,342,492 times
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Quote:
Originally Posted by CouponJack View Post
If you are going to put more down, make sure you have a sufficient emergency fund. Many people become flat broke after their down payment which can add a ton of stress.....
Not only an emergency fund, but unforseen housing expenses, plus all the things people want to do to personalize their homes. it adds up fast, especially the first time. Been there, done that.
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Old 06-28-2012, 07:17 PM
 
162 posts, read 188,188 times
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I think you should have a min of one years expensives saved. The way the economy is now you never know what can happen with your job situation.

I am looking to purchase a duplex so I can live in one side and rent the other side. The first mortgage broker I met with suggested I put down as little as possible and keep my money put away for emergencies or invest it. I was all about 20% down, because I thought that was the right the thing. I think it depends on what you plan to do. If this is going to be your home long term I would consider putting more down, but definitely less than 20%


Quote:
Originally Posted by amploud View Post
I second this. I don't know your financial situation, so it is hard to make a definitive call.

If the 20% down payment will allow you to keep at least 6 months of living expenses on hand and you are confident in the stability of your employment, then put 20% down.

If you won't have much left over after the down payment or if you aren't fairly confident about the stability of your job, put down less. It makes little sense to make a big down payment only to have major financial problems later which additional savings would have allowed you to avoid.
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