25% down pay, for real? (West, Westlake: renting, how much, buying a home)

[llkltk]

Originally Posted by Mike78613

Not really. Sad to say, but it was the one's who didn't put anything down, that went into default (foreclosure , bankrupt).

On our next home purchase, it will be 20%-30% down! Dependent on one income, of course we have two incomes but you never know in this crazy economy!
Who really wants to loose there home over one-income loss? really??



The one's who don't / willing to put money down do not deserve a house. Take a stroll down down DR. Horton homes out in Hutto or go to Leander, where people can get 0% down and look how $hitty the neighborhood look. Take a look at these peoples yards and all the cars in the drive way. NO WAY and HOA still has no control over that. These people are most likely used to be non-responsible renters that hopped into a market that allowed 0% down and even though these people got a good deal by walking into something with no-money down. It really is a headache soon to happen again.


IMHO - bank lenders really should not approve the amount of a home / house on GROSS annual income, but more on liquid income / NET-INCOME (after taxes, deduction of 401k, child support, alimony, 401k loans and other deductions on per-pay-check).



There's just too many people with deductions out of their paychecks and gross income is just a bad sign of writing a bad-loan.


Cheers

Honestly 30% down is kind of silly. Either put down 20% or pay for the house in full. Makes no sense to put down another 10%.

[sinking]

Originally Posted by llkltk

Honestly 30% down is kind of silly. Either put down 20% or pay for the house in full. Makes no sense to put down another 10%.

It makes sense to put down as much as possible. The only way it wouldn't is if you can guarantee you can make more investing the money than you are losing by paying interest on it.

[jobert]

Originally Posted by sinking

It makes sense to put down as much as possible. The only way it wouldn't is if you can guarantee you can make more investing the money than you are losing by paying interest on it.

You have it figured out. Can't rep you enough.

[XLadylawX]

Originally Posted by sinking

It makes sense to put down as much as possible. The only way it wouldn't is if you can guarantee you can make more investing the money than you are losing by paying interest on it.

I look at mortgage interest as the cost of shelter. It is my experience, that shelter always comes with a cost. I also leverage the mortgage interest deduction too, which reduces my over all tax liability. The money that goes towards principal really just goes back in my pocket in the form of equity.

Investment returns is a factor but the above must also be considered.

[sinking]

Originally Posted by XLadylawX

I look at mortgage interest as the cost of shelter. It is my experience, that shelter always comes with a cost. I also leverage the mortgage interest deduction too, which reduces my over all tax liability. The money that goes towards principal really just goes back in my pocket in the form of equity.

Investment returns is a factor but the above must also be considered.

I haven't filed taxes since buying my house so I am not sure if I have this correct but doesn't mortgage interest just get deducted on the standard schedule A? If this is true then the benefit there may be less advantageous than many people argue or not advantageous at all. Since the standard deduction is $5,700 you will have to itemize more than that to see any benefit. When I do my 2011 taxes with my first full year of ownership between property taxes and MI my itemized deductions won't be much more than that. For someone who is nearing the end of their mortgage and the MI is very low they may not even crack $5,700 if they don't have many other deductions.

[LittleCityATX]

You are right, most people get little/no benefit from the mortgage deduction because they get more from the standard deduction. The mortgage deduction mostly goes to those with high incomes and expensive homes. A family making 60K, living in a 200K house likely gets no benefit unless they have a lot of deductions for other reasons.

[curious1111]

We just went through all this. Our credit scores are 780-800 (basically, near perfect). We still had to put minimum 20% down. We're doing it, but not happy about it. Has nothing to do with not having the money or affording the home, we are buying far less than we could. But the idea of sinking a bunch of cash into a house right now just doesnt sit right. For those saying its like a mutual fund/investment, not exactly...at least not lately. We feel a bit as we are being punished for those that irresponsibly lent money or borrowed it. The other thing that this caused us to do is buy less house than we could have really afforded. What is the impact that if multiplied across the country? Its great if it prevents those who cannot afford homes at certain prices from buying them. But it also may deter families like us from buying more home. Sure, we will have more cash laying around each month, but we will probably put that in savings -- not back into the economy or housing market like we would have if we had a 10% down type option.

Cant complain about rates though. 4.75 on 30 yr fixed jumbo... very happy about that

[Exiled Texan]

Curious- That is a good rate on a jumbo.

[sliverbox]

25-30% used to be what you had to put down on a house anyway. In my opinion this is the way it aught to be and if I had my way, that rate would be closer to 30%. One of the main reasons the housing market went through such a huge bubble over the last few years was because people were not putting any skin into the game: There were no down payments. All that did was cause prices to inflate out of control. With a significant down payment requirement up front this will help keep the lid on prices a bit more.

Personally we're probably going to buy our first house for cash. I see little benefit to paying years and years of interest payments.

[TimtheGuy]

Originally Posted by debzkidz

We have been looking at buying a second home for a few months, and were told back in November by several national lenders that you could not get a loan on a second home with less than 25% down.

Never happened. 20% has been the standard all along. Sometimes you can get a better deal with 25% (i.e. investment property or condo).