| How much did you put down on your house? |
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fultron
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| How much did you put down on your house? |
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If you own your own home, how much did you put down as a down payment, percentage-wise?
A few years ago we bought our first house and could only put down about 8%.
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Tue Jan 17, 2006 7:11 pm |
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coaster
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About 30%. The plan was to take out a 15-year loan, and 30% down gave me a monthly payment that was "comfortable."
~Tim~
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Wed Jan 18, 2006 1:21 am |
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Stoney
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| downpayment |
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I put down 15% on a few years ago on my first purchase... That is a great topic of discussion though!
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Wed Jan 18, 2006 10:42 am |
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No-Brainer
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| It's been a while |
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Our first house we put down $500 and made $100 a month payments 34 years ago.
Our current house was $41,000 and we put down $5,000 from the profit received selling the first house 29 years ago.
We just refinanced to borrow $100,000 and it appraised for $290,000
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Wed Jan 18, 2006 1:48 pm |
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Rolo
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Both houses: zero.
Mortgage money is cheap; take advantage of it.
"Expect me when you see me."
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Thu Jan 19, 2006 1:06 am |
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Jaszbo
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I like coaster response and have to agree with him that doing the 15 year mortgage is what I prefer also.
Personally the 20% down is to avoid PMI, even though there's ways to avoid PMI you are still paying for it. Depending on your lender, some give you a better rate the more you put down. My lender for instance gives the best rate at 20% down, but my lender for instance is one of the only lenders I know that doesn't charge PMI if you put down at least 3%.
If you only put down 8% and you're paying PMI watch the value increase and if you've gone over that 20%, some require 25% if it's not a refiance to get rid of PMI.
If you put 8% down and you want 20%, I'm calculating about 3.5 years of holding if you assume only a low 3% apprecation per year. Some lenders do require you though to keep your house for a certain amount of time before getting rid of PMI and even some require a higher than 20% increase to get rid of it. If you can get a better rate out there and don't mind paying the closing cost, you can get rid of the PMI right away instead of waiting.
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Thu Jan 19, 2006 2:32 pm |
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Rolo
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quote:
Originally posted by coaster
"comfortable."
A deceptive emotion.
I could not be comfortable knowing I threw away an 11% return (minimum, investing) in favour of a 5.75% (mortgage interest) return.
PMI is not always required if you do not pay 20% down. PMI is a fee and I never pay fees. I'd rather burn money than pay fees...that way, at least I get some entertainment out of the same result.
"Expect me when you see me."
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Thu Jan 19, 2006 11:05 pm |
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efflandt
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In 2002 I put 20% down on my first home for 30 yr fixed, and then refinanced in 2005 to 20 yr lower fixed rate to knock off 7 yrs of payments and $62k of interest. Since it was with the same lender, refinance closing costs were only $170.
If I have any money left after maxing out my 401k and Roth IRA, I have been direct purchasing/div. reinvesting stock in my bank. With any luck the return will more than double the savings of paying down the principal early. It currently pays ~4.5% dividend, which alone covers loan interest on that money (with all tax considerations). Although, I could do better with stock in a foreign bank (one I bought Oct. 4 in my IRA is up 34%).
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Fri Jan 20, 2006 3:06 am |
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bong12187
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quote:
Originally posted by Rolo
quote:
Originally posted by coaster
"comfortable."
I could not be comfortable knowing I threw away an 11% return (minimum, investing) in favour of a 5.75% (mortgage interest) return.
PMI is not always required if you do not pay 20% down. PMI is a fee and I never pay fees. I'd rather burn money than pay fees...that way, at least I get some entertainment out of the same result.
When would it be ok to pay PMI? I've actually bought a property using 10% and I am currently paying PMI. The purchase price was 115k using 30 yr amort with 7.5% interest. Rolo is right that PMI is not always required however, if you do have to pay the PMI, please do the numbers to see if it is worth putting down higher down payment to forego PMI. Looking at the numbers I provided, putting a downpayment of 11.5k (10%) instead of 23k (20%) clearly show that the cash on cash return (PMI is $75 per month) is not as significant. BTW, rent is 1100 per month. Thanks...
B
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Fri Jan 20, 2006 9:11 am |
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Rolo
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quote:
Originally posted by bong12187
Looking at the numbers I provided, putting a downpayment of 11.5k (10%) instead of 23k (20%) clearly show that the cash on cash return (PMI is $75 per month) is not as significant. BTW, rent is 1100 per month.
That's a good point.
..from an up-and-coming Donald Trumpster.
"Expect me when you see me."
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Fri Jan 20, 2006 12:39 pm |
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mattb79
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With a downpayment for real estate, the more the better right? Can anyone describe a situation where it may be in your best interest (in terms of the loan) to not max out the down payment?
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Sat Jan 21, 2006 2:48 am |
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bong12187
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quote:
Originally posted by mattb79
With a downpayment for real estate, the more the better right? Can anyone describe a situation where it may be in your best interest (in terms of the loan) to not max out the down payment?
Again, it depends... If you are buying real estate for your own, I would probably recommend that you put as much downpayment as you can. However, for real estate that involves flips and passive income, less money that comes out of your pocket the better. Lets look at one example here. You have 20k for downpayment. If you buy a property with zero down, and you flip it for 120k within 2 months your cash on cash return is 20,000% (maybe less because you had to pay 2 months of mortgage pmt). If you put 20k down, and the same scenario applies, your cash on cash return is 400% (within two months of course). Such a big difference, huh?
For passive income, the criterion is the same with the exception of you having to know the rental market well so that if you get a zero down loan, your monthly rent must exceed the monthly mortgage + insurance + taxes + etc. etc....
Rolo... BOINK!!!! too funny....
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Sat Jan 21, 2006 9:01 am |
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Rolo
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quote:
Originally posted by mattb79
Can anyone describe a situation where it may be in your best interest (in terms of the loan) to not max out the down payment?
I did. Mortgage money is cheap. Can you make a greater return on investments than you pay for a mortgage?
My whole IRAs made 37%, 34%, and 30% over the past year and my crappy index-fund only TSP made 18+% for the past one and three years; why would I pay down a 5.75% loan?
"Expect me when you see me."
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Sat Jan 21, 2006 3:06 pm |
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sam1000
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Almost all first time buyers in SoCal put 0 down (usually combined with an interest only loan) because the prices are so atriociously high. Even 10% down on a $650,000 house is $65,000, most first time buyers don't have that kind of cash lying around for just a downpayment 
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Wed Jan 25, 2006 1:41 am |
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Kirby
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The old standard of 20% here when my family purchased a house recently.
www.kirbyonfinance.com: the best personal finance information on the web!
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Wed Jan 25, 2006 5:49 am |
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