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Forgive my ignorance but what is the consensus so far? 20% or 5% and invest the rest?
Consensus is make sure you have cash available, where it means only 5% down, or 20% with a 10% heloc. How long did take for you to save 20%? After the purchase how long would it take to save up that 20% again?
Forgive my ignorance but what is the consensus so far? 20% or 5% and invest the rest?
I'm not going to do the math. But someone above said that the effective interest rate on the extra 15% was 10 percent. If that is the case it make sense to put down 20% if you have the reserves to do it.
Same. I am probably one if the few doing this in my office. Between seller credit and Lender Credit, my last 3 out of 4 buyers have been bought out of their PMI for life.
Forgot to add: all price ranges are red hot in DC area. We are seeing full price offers w/ seller concessions.
Then your market isn't that hot. In a really hot market multiple,offers come in at and above ask and the seller wouldn't have to accept concessions. I listed summer and had multiple offers with in 4 hours of listing ended with 7 offers all over ask by the 24 hour mark, of one was asking for concessions they'd have the be the highest by at least their concessions
Well you can add the stated interest rate to the 2.78% but as you pay down the loan monthly that 2.78% climbs in percentage terms until you remove the mortgage insurance
^^^^This. When half of the excess debt is paid off, this goes to 5.56% and then you add the actual mortgage rate. Hence "close to 10%".
^^^^This. When half of the excess debt is paid off, this goes to 5.56% and then you add the actual mortgage rate. Hence "close to 10%".
Excluding the HELOC option,
Which is better, the 20% down, the money is going to the principal reduction and no PMI payment, the return on your money is 3.5% + 2.78% call it roughly 7% in the first few years
or a fee (no principal reduction) of $6600 to for a single PMI payment, where you have a calculated return on your money of close to 20%?
If you can't make 4% on your $40,000 a year, you probably shouldn't be managing your money yourself.
The picture I can envision of a seller being asked to pay for this in my market is extremely amusing.
You'd be surprised how often this occurs and I'm in LA. If a real estate agent does 't know how to present this type of offer, you should get a new agent.
You'd be surprised how often this occurs and I'm in LA. If a real estate agent does 't know how to present this type of offer, you should get a new agent.
Yeah I mean a lot of people don't really understand seller concessions. It's not really that the seller is accepting less money, it's just a way for the buyer to roll these costs into their mortgage. Of course, if there is another offer for the equivalent amount with no concessions, then the buyer wanting them will usually have to pay more.
Yeah I mean a lot of people don't really understand seller concessions. It's not really that the seller is accepting less money, it's just a way for the buyer to roll these costs into their mortgage. Of course, if there is another offer for the equivalent amount with no concessions, then the buyer wanting them will usually have to pay more.
Exactly. A few years ago, cash offers were strong because of appraisal issues, now the cost are just rolled into the home just like agent fees.
If you put down less than 20 percent, you will be charged PMI. Monthly charge how large depends on your mortgage. It used to easy to get out of PMI, not so anymore. You could literally carry it forever and its not going toward your balance its going towards an insurance policy in case you default. The less you put down, the larger the risk you wont pay.
Unless you can make more than the insurance premium, put down the 20 percent. It can really add up
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less than 20 percent
