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What is the typical downpayment these days percentage wise? The median price for a home here in Orange County is $613,000 so 20% down + 3% closing costs would be $141,000 cash to the table.
I SERIOUSLY doubt the median buyer here has that much cash just lying around. The median household income here countywide is $78,000/yr and even in affluent parts of the county does not exceed around $120,000/yr gross.
Are people going FHA with it's 3.5% down? If so are they paying the exorbitant fees associated with FHA loans?
I'm just trying to wrap my head around how the average buyer who seems to be broke when I look around me (people financially struggling) and people who just a decade ago were struggling to buy $300,000 homes are suddenly able to afford homes twice as expensive with 10-20% downpayments.
I also assume a first time buyer is not looking in the $600k range. If a first time buyer is looking to get into the real estate market, they would likely look into condo, which would be much much less. OR they would likely be steered into looking into surrounding neighborhoods.
I just purchased a new home, and was hoping to use the funds from the sale of my current home as part of the down payment, however, our house is still on the market. We only did a 5% downpayment (have to do PMI, but oh well), and that was with a 30-year fixed conventional.
easternDC, starter condos/townhomes are $500,000+ here, that is what I am saying... the inventory below this mark is unsavory and in questionable areas! So yes, entry level buyers are buying half million dollar houses. The mid range of the market is around $750,000!
Getting help from family with the down payment is quite common.
Or cough up 10% and pay PMI. Or do 80/15/5 or 80/10/10 so you are only putting down 5% or 10%. It seems like there are multiple options to get what you want...even if it stretches the budget.
I live in LA, I have been approved for a purchase price of up to $350K using an FHA 3.5% down loan on an $80K income. The mortgage insurance with FHA will be about $400/month. I cannot find anything habitable or move in ready -- better than the house I am currently renting for $1500 a month. At this time, it just does not make sense for me to buy. Around me, houses sell $50-100K over the purchase price and many of the houses have already been flipped 2 times this year.
I live in LA, I have been approved for a purchase price of up to $350K using an FHA 3.5% down loan on an $80K income. The mortgage insurance with FHA will be about $400/month. I cannot find anything habitable or move in ready -- better than the house I am currently renting for $1500 a month. At this time, it just does not make sense for me to buy. Around me, houses sell $50-100K over the purchase price and many of the houses have already been flipped 2 times this year.
Sounds like another bubble....
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