House down payment

[slakjaw]

Originally Posted by Z-man

Interesting. I am looking to sell my home that I've lived in for over 20 years and move into a nicer, slightly more expensive home. I am free and clear on my home (paid off my mortgage 7 years ago), and am hoping to close on the sale of my current home before I purchase my new home. Thus, I would likely be putting 75% or more down on the home, so I can enjoy a relatively small monthly mortgage payment.

What I am doing financially is typically considered to be an 'old school' way of doing things. (Take on the smallest amount of a loan possible & pay off debt ASAP). Yet based on POP's comments, this type of scenario is looked upon negatively. I'm not flipping my home, nor am I an investor -- I just believe in minimizing my debt first and foremost.

Interesting how an old school way of thinking (pay off debt, minimize loan amount) can be confused with a new type of investing (flipping a house). From totally different sides of the financial spectrum, yet the action (putting 75% down) is similar.

-Z-man.

PS: I have already gone through the pre-approval process, and the numbers my mortgage person is giving me are far higher than would I would be comfortable taking on a loan for. So my max budget is lower than the mortgage person's allowable budget for me. As stated before, I don't want to be house-poor. I'd rather take a modest bump in my house than live in a mansion decorated with lawn furniture and have cupboards filled with Rahmen Noodles. Old school works best, IMHO.

I thought that was interesting as well. I saved up enough to put 20% on a ~190k house. I am no flipper. if I hadn't saved id be over in Brooklyn park with the gang-bangers. I felt I needed the down payment to be able to survive the mortgage payment.

[icemann427]

As long as you have a solid pre-approval letter from a legitimate lender, your down payment shouldn't matter all that much to a seller. As long as said letter states the amount of the down payment (the percentage of purchase price), you should be good to go in all but the most competitive markets where multiple offers are the norm. Regarding your credit worthiness, the seller is not privy to it, and as long as you have your letter, negotiate away, my son.

[VincentVega]

As a seller, buyer loan terms only mattered when I learned 1 buyer wanted to finance more than the asking price. If their appraisal didnt come in where we needed it there would have been issues.

It's still a crap shoot until you get the $$.

[slakjaw]

Well. They countered my offer with a retarded amount so I'm out.

[slakjaw]

That was a lot of fun though exciting!

[JavaBrewer]

It's a game man. Counter back with a FINAL offer that's close to your original offer. Either the seller/realtor is fishing or worst case they can't do the deal (upside down) at the price you are at.

[look 171]

Next, don't give up.

[RANDY P]

Originally Posted by KC911

I know you're in the "biz", but please help me understand. I was approved for borrowing xxx amount way back when. The % never entered into the equation at all. Though I absolutely despise banks, I did work for a mega-bank way back when so I also received an "insider's" rate at the time...how does it work from your perspective (in a nutshell)? Do you think "saving up to the 20% mark" (while paying rent) trumps the pretty minimal PMI and a slightly better loan rate? I don't...at least it sure didn't for me. Not arguing with a "pro"...I just know that one size doesn't fit all either....YMMV

ps: Not taking advantage of the historically low interest rates and rock bottom housing prices that begain to climb about one year ago would not make sense to me. Slak is still in a great position...he's gonna be just fine...I'm just asking?

PMI is a hard and fast rule for any single loan you take out that has less than 20% down. They either give you PMI or raise the rate to compensate it for it.

Lots of people settle for PMI because they have no choice.. Anyone with assets usually puts the 20% or more down, and gets the best possible deal and fastest approval.

Anytime you go below 20% down, more restrictions, harder qualification applies....

PS the only real low down games in town anymore are FHA, VA, and 5% conventional programs-

all of which suck rate and payment wise (except, possibly VA)and are no real deal compared to putting an honest 20% down.. Putting less than 20% down will make the payment jump considerably.

Remember, that you might've gotten a "good deal" but the rates and pricing are still within a specific bracket based on your downpayment. Less down payment = different pricing bracket, and it sucks these days due to the housing and economy situation.

rjp

[slakjaw]

They came back above the asking price. is that a game or are they saying FU ?

[Aragorn]

Originally Posted by slakjaw

They came back above the asking price. is that a game or are they saying FU ?

Can The Seller Give A Counter Offer Over The Original Listing Price?

[look 171]

there might several over the asking offers so they are trying to bid it up. I hate that. You just have to go in with your best and final offer with the plan to walk away form it and go off to the next one. your agent can tell you that, but not sure if you can request to see other offers to see if its true that there are other offers. I feel bad for first time buyer in this market.

[mikesride]

The only diff the 20% makes in the deal, around these parts is that you no longer need mortgage insurance, and of course a smaller loan....No change in rates....

[KFC911]

Originally Posted by slakjaw

Thanks guys. I do have an approval letter which I included with my offer. I don't have the the best credit. Not bad I guess but not much either. 2 credit cards is all I have ever had, they called it thin credit and my rate will be 4.75% is this a good rate for a first time buyer with little credit history?

I think so...is 4.75 fixed? It's all relative...these are still historically once in a lifetime rates...in '93, I think my 30 year fixed was 7.625 and a few years later I refied with a Credit Uniioin (highly recomnended) foir 6.125. I think I was about the age you are now fwiw.

Originally Posted by slakjaw

I thought that was interesting as well. I saved up enough to put 20% on a ~190k house. I am no flipper. if I hadn't saved id be over in Brooklyn park with the gang-bangers. I felt I needed the down payment to be able to survive the mortgage payment.

You've done good Kyle...had a plan and now you're ready to make a move...I looked for six months (just like searching for my Carrera) mostly on my own...figuring out what I wanted, etc. and waiting for the "right" one to come along.

Originally Posted by RANDY P

PMI is a hard and fast rule for any single loan you take out that has less than 20% down. They either give you PMI or raise the rate to compensate it for it.

Lots of people settle for PMI because they have no choice.. Anyone with assets usually puts the 20% or more down, and gets the best possible deal and fastest approval.

Anytime you go below 20% down, more restrictions, harder qualification applies....

PS the only real low down games in town anymore are FHA, VA, and 5% conventional programs-

all of which suck rate and payment wise (except, possibly VA)and are no real deal compared to putting an honest 20% down.. Putting less than 20% down will make the payment jump considerably.

Remember, that you might've gotten a "good deal" but the rates and pricing are still within a specific bracket based on your downpayment. Less down payment = different pricing bracket, and it sucks these days due to the housing and economy situation.

rjp

I understand all of that, but just simply disagree from a strict quantitative analysis perspective as it applied to me...everyone's MMV.

Originally Posted by look 171

there might several over the asking offers so they are trying to bid it up. I hate that. You just have to go in with your best and final offer with the plan to walk away form it and go off to the next one. your agent can tell you that, but not sure if you can request to see other offers to see if its true that there are other offers. I feel bad for first time buyer in this market.

I think Slak's in a great position as a first time buyer right now. I can't relate to CA real estate discussions at ALL however .

[RANDY P]

It's the increased rate premiums, PMI and all sorts of other retarded problems with less than 20% down that's the issue. The relationship is not linear as the down payment lessens.

Just restating the obvious, that's all

[RANDY P]

Originally Posted by Rusty914s

Few items:

1. What you put on the contract and what you do in actual life can be two different things. Can put 20% and only put down 3% but see item #4...this is a little more complicated but it's true.

2. 3% and 5% loans are back w/amazing terms.

3. If you're a first time borrower, if this is going to be your primary...check with your lender, rates will probably be more beneficial.

4. Get an actual pre-approval letter where lender goes through all of your financials and tells you exactly what you have in your hands, not the kind that you call the bank, answer a few questions, and they send you a letter.

5. ALWAYS, try to go directly to a bank to get a loan...you'll forgo fees that brokers often charge for their services. Not all banks are created equal. ALWAYS go to local banks and try 3 or 4...ask your broker what bank will look at your deal favorable.

6. If banks can't put it together, a creative BROKER may have access to a different cash source. Don't discount Brokers...once again, all not created equal. Ask your RE broker (also, not all created equal).

1&4 OK. 3 is just well, DUH. Rest of of this info is generally incorrect- 2&5 especially is LOL.

rjp

[drmatera]

when I was house hunting I noticed some sellers would only entertain a conventional loan, no FHA ( less than 20% down) loans accepted. I guess they figured it would weed out the "dead beats" that didn't save their pennies. I put 25% down on my house, but doubt I'll do the same on the next one. I would rather have the $70k-$80k in my bank account and pay a slightly higher monthly nut... I pay extra principal every month anyhow, so no biggy

[Rusty914s]

Originally Posted by RANDY P

1&4 OK. 3 is just well, DUH. Rest of of this info is generally incorrect- 2&5 especially is LOL.

rjp

That you don't know nor understand doesn't make it LOL, it just makes you ignorant. It's ok.

[RANDY P]

Originally Posted by Rusty914s

That you don't know nor understand doesn't make it LOL, it just makes you ignorant. It's ok.

Your information was current, back in 1985. You sound like a RE agent.

Stay away from lending.

rjp

[dmcummins]

I'm closing next week, I'm putting down 50% and told the buyer that I could close in 30 days. I got a loan @ 4% for 30 years. I could pay cash, but figured the money was fairly cheap. I figure I could always pay it off early if I chose and it's cheap money for now.

Got the loan from a local bank where I have an account. Needed more information for the bank than in the past. I had the show where the money was coming from, stock sales, ect. They don't like cash, have to be able to track the money.

[Rusty914s]

Originally Posted by RANDY P

Your information was current, back in 1985. You sound like a RE agent.

Stay away from lending.

rjp

I'm a RE developer, you don't sound like you're in the industry.