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Started By
Message
re: First Time Buying a House
Posted on 1/20/16 at 2:16 pm to CE Tiger
Posted on 1/20/16 at 2:16 pm to CE Tiger
quote:
this is a load of shite. if you have a good job put down the 3.5% and enjoy life. nothing worse then someone dumping 20% into a house and then is miserable because they have no money for fun and just sit in their house eating pb&j or ramen every night. you are going to want money remaining in your saving when the ac breaks or to actually be able to afford to buy shite for the house
This is the attitude that makes so many Americans overextended on their finances. Maybe you wouldn't be eating pb&j and ramen every night if you bought a house you can afford. Maybe you can't afford that 250k house with the 50k down payment. So don't buy it. Stay within your means. Especially on your first house.
I'm not saying there aren't certain instances where when you are on the low end of the spectrum, and can't scrounge up 20k to put down on a 100k house, that it wouldn't be worth it. On that type of note, you are coming out so far ahead of rent, that it may be okay to not have 20% down. But I know a lot of people who would put 3-5% down on a 300k house if the bank let them. If you can't save 60k, you can't afford a 300k house.
6
Posted on 1/20/16 at 2:16 pm to yellowfin
quote:With current interest rates being low, why? It makes no sense
save some money for a down payment
So lets say person A puts 20,000 down on a house that was 200,000. So there loan is 180,000. They move 3 years later, selling the house for 203,000, meaning they only actually gained 3,000.
Lets say person B puts 0 down. There loan is worth 200,000. They sell for 203,000 meaning they still make 3,000. Now they may have to come out of pocket for realtors fees etc etc, but they arent out anymore money then person A
IMHO, putting more money down should only be done when interest rates are high or you have a volatile job
Posted on 1/20/16 at 2:18 pm to KG6
quote:I disagree
If you can't save 60k, you can't afford a 300k house.
Posted on 1/20/16 at 2:19 pm to KG6
quote:
But I know a lot of people who would put 3-5% down on a 300k house if the bank let them. If you can't save 60k, you can't afford a 300k house.
Posted on 1/20/16 at 2:19 pm to Salmon
Like I admit in the other post, I do realize that their are situations where it's acceptable. But when you get to the point where you are buying "more house than you need", then you are fricking up if you don't put down 20% in my opinion.
Posted on 1/20/16 at 2:21 pm to KG6
quote:
If you can't save 60k, you can't afford a 300k house.
i had a great job out of college making much more than most people my age but im pretty sure there was no way in hell I would have ever been able to save $60k.
I bought a 220,000 house and put 3.5% down. Im much happier paying a little more house note each month then if I would had obliterated my savings account and put another $20k down (which I doubt I even had at the time)
Posted on 1/20/16 at 2:21 pm to lsupride87
quote:
With current interest rates being low, why? It makes no sense
keep from paying PMI which basically negates low interest rates
Posted on 1/20/16 at 2:22 pm to KG6
quote:
This is the attitude that makes so many Americans overextended on their finances
Agreed. Not in every case is this correct but there is a reason the average household credit card debt is over $15K and living beyond ones means is one big reason.
Posted on 1/20/16 at 2:22 pm to KG6
quote:
If you can't save 60k, you can't afford a 300k house
So if you live in an area where 300k is the low end of the real estate market for homes in the area you are just SOL and should rent the rest of your life?
Posted on 1/20/16 at 2:22 pm to yellowfin
quote:
keep from paying PMI which basically negates low interest rates
well not really since PMI eventually goes away
Posted on 1/20/16 at 2:23 pm to Displaced
quote:
i guess it depends on the bank too. we ended up going with NFCU conventional. we are only putting down 10% and dont have to pay pmi
I'm assuming you're doing an 80/10/10 loan then. If not, the lender is likely charging you a higher rate than they otherwise would.
Make no mistake about it - you're paying for it one way or the other.
Posted on 1/20/16 at 2:24 pm to Salmon
it negates them as long as you are paying them
his example they only kept the house 3 years and it only appreciated 3k
his example they only kept the house 3 years and it only appreciated 3k
Posted on 1/20/16 at 2:24 pm to KG6
quote:
It's almost always wise to put down 20%. I know that's not always possible for everyone, but maybe you can't afford the house if no
It's a great rule of thumb for a 2nd home... but if we are talking about first time home buyers, I disagree. No one would have 20% to put down until age 30 other than about the top 5% of income earners.
If you have 20% before age 30, you either got help from your parents, are living rent free (or close to it), have no student loans, aren't maxing a Roth IRA, etc. or some combination of these...
Posted on 1/20/16 at 2:24 pm to PhiTiger1764
quote:I did FHA and my interest rate is 3.1%. That's pretty damn low
go with the conventional loan over FHA or RD. Your interest rate will be lower
Posted on 1/20/16 at 2:25 pm to CE Tiger
quote:
i had a great job out of college making much more than most people my age but im pretty sure there was no way in hell I would have ever been able to save $60k.
I bought a 220,000 house and put 3.5% down. Im much happier paying a little more house note each month then if I would had obliterated my savings account and put another $20k down (which I doubt I even had at the time)
I was making 6 figures at 26 years old and still bought a 175k house with a note of around $900 a month. I didn't live like I was poor or anything. I wasn't "unhappy". It was a starter home. I then saved enough money to put a 20% down payment on a much nicer house in a much nicer area 3 years later.
This post was edited on 1/20/16 at 2:59 pm
Posted on 1/20/16 at 2:26 pm to KG6
quote:
I then saved enough money to put a 20% down payment on a much nicer house in a much nicer area 3 years later.
didn't your parents give you like $80k after college?
Posted on 1/20/16 at 2:26 pm to lsunurse
quote:So just throw away $1200-1500/month on rent until you're in your 30's?
If you can't save 60k, you can't afford a 300k house
Posted on 1/20/16 at 2:27 pm to KG6
quote:I
I was making 6 figures at 26 years old and bought a 175k house with a note of around $900 a month
love
this
board
Posted on 1/20/16 at 2:28 pm to yellowfin
quote:I pay no "pmi" because I took an interest rate of 3.5% instead of 3%. I still feel pretty damn good about 3.5% and am more than happy I put down the minimal amount
it negates them as long as you are paying them
his example they only kept the house 3 years and it only appreciated 3
Posted on 1/20/16 at 2:29 pm to PhiTiger1764
quote:
Your interest rate will be lower and PMI goes away once you reach 22% equity. Much better loan.
There are a lot of reason to go with conventional over FHA, but a lower interest rate is not usually one. Obviously there are exceptions, but FHA tends to be lower than conventional on average.
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