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Old 04-09-2015, 11:56 AM
 
Location: Streamwood, IL
520 posts, read 508,394 times
Reputation: 1214

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Quote:
Originally Posted by BrianHunter View Post
I do not believe the average buyer does not put down 20%. Do you have any published stats to back that up? That would be scarey if that were the case.

There are too many people out there that have less than 20% down and yet they go on expensive vacations, buy new cars every few years etc. You want to own a house, give up the vacations and new cars for 10-15 years and save the down payment.
The average downpayment can go as low as 5%.
The recommended figures are 10-25%.
Minimum Down Payment for a Mortgage - Budgeting Money
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Old 04-09-2015, 12:15 PM
 
397 posts, read 435,205 times
Reputation: 393
Quote:
Originally Posted by BrianHunter View Post
I do not believe the average buyer does not put down 20%. Do you have any published stats to back that up? That would be scarey if that were the case.

There are too many people out there that have less than 20% down and yet they go on expensive vacations, buy new cars every few years etc. You want to own a house, give up the vacations and new cars for 10-15 years and save the down payment.
All of America's middle class gives up vacations and new cars and just see what that does to the economy.

I don't have time to look for this now but the 20% down is a fake number. Just like the 30 year mortgage. It was invented when all of this was started in the mid 20th century. There's no reason why 20% matters more than 10% or whatever. It's no magic number.

There is no correlation between a 10% downpayment and a higher default rate. Or even a 5% downpayment or 3%.

Requiring a 20% downpayment for all homebuyers would force most of America's middle class to remain renters.
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Old 04-09-2015, 12:23 PM
 
861 posts, read 1,058,144 times
Reputation: 782
Quote:
Originally Posted by BrianHunter View Post
I do not believe the average buyer does not put down 20%. Do you have any published stats to back that up? That would be scarey if that were the case.

There are too many people out there that have less than 20% down and yet they go on expensive vacations, buy new cars every few years etc. You want to own a house, give up the vacations and new cars for 10-15 years and save the down payment.
10-15 years?!?! Lol
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Old 04-09-2015, 12:49 PM
 
107 posts, read 175,487 times
Reputation: 75
Quote:
Originally Posted by Runuova View Post
10-15 years?!?! Lol
I currently drive a 2001 suburban that I bought when it was 1 year old.
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Old 04-09-2015, 01:40 PM
 
861 posts, read 1,058,144 times
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Quote:
Originally Posted by BrianHunter View Post
I currently drive a 2001 suburban that I bought when it was 1 year old.
Good for you! I have my house and a 2014 Ford!
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Old 04-09-2015, 01:41 PM
 
11,972 posts, read 26,853,926 times
Reputation: 4547
Here is an interesting study that says that requiring a 20% down payment would eliminate 60% of home buyers.

Study: 20% Required Down Payment Would Push 60% of Borrowers Out of U.S. Housing Market | TIME.com

This study has detractors, who say that it would just increase the cost of borrowing. But another part of the study claims that it shuts out ten homebuyers for every one prevented foreclosure. Worth the cost? Worth the risk?
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Old 04-09-2015, 01:43 PM
 
11,972 posts, read 26,853,926 times
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Note that even today, you typically need a high credit score to be able to put down less than 20%.
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Old 04-09-2015, 01:53 PM
 
107 posts, read 175,487 times
Reputation: 75
Quote:
Originally Posted by Runuova View Post
Good for you! I have my house and a 2014 Ford!
That doesnt surprise me. Does the bank own the Ford too? lol

Maybe 20% is too high but what about 10%? Or have the government give tax incentives to pay your house off.

Its obviously not an easy fix but Americans rely on debt way too much.
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Old 04-09-2015, 01:56 PM
 
394 posts, read 245,014 times
Reputation: 1461
Just remember that the numbers you get on online calculators will generate a MAXIMUM amount, not a required amount. The banks will loan you more than they should, a realtor will sell you the most that they can. It's up to YOU to say No, I don't NEED that much house.

I have paid off 2 houses, one in 10 years, the other in 12. I always took 15 year FIXED loans. I also saved in my IRA and my 401k. I'm not that smart, anyone can do it.

Good luck, and keep it real.
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Old 04-09-2015, 02:06 PM
 
861 posts, read 1,058,144 times
Reputation: 782
Quote:
Originally Posted by BrianHunter View Post
That doesnt surprise me. Does the bank own the Ford too? lol

Maybe 20% is too high but what about 10%? Or have the government give tax incentives to pay your house off.

Its obviously not an easy fix but Americans rely on debt way too much.
You assume a lot don't you? Poor guy!
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