Minimum Amount Needed to Put Down on Home Purchase
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Minimum Amount Needed to Put Down on Home Purchase
Posted by Cajun Revolution on 12/26 at 1:35 pm
What is the minimum amount I will need to put down on a home purchase these days? I wasn't planning on putting down for at least another year to build up but I've been encouraged during to try and jump on these interest rates before they recover.

I was planning on 10-15% next year but I heard rumors of much less. Like nothing for some.


This post was edited on 12/26 at 1:36 pm

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Posted by LSUtoOmaha on 12/26 at 1:59 pm to Cajun Revolution
I think it's 20% to avoid PMI, and 10% as a minimum unless you are a veteran or qualify for a rural house loan.


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Posted by LSUAfro on 12/26 at 2:20 pm to LSUtoOmaha
Also,
FHA is 3.5% and I wouldn't put down a penny more if you don't have to.



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Posted by LSUtoOmaha on 12/26 at 2:28 pm to LSUAfro
nevermind


This post was edited on 12/26 at 2:32 pm

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Posted by HurricaneDunc on 12/26 at 2:28 pm to Cajun Revolution
3.5% FHA
5% Conventional
Still some 0% rural/VA type loans out there I think, but I don't know much about them or who qualifies



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Posted by nikki6 on 12/26 at 2:32 pm to HurricaneDunc
I did a conventional loan on 12/6 of this year and our rate was 3.37%. We put 20% down.


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Posted by GFunk on 12/26 at 3:09 pm to Cajun Revolution
$0


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Posted by VABuckeye on 12/26 at 4:25 pm to HurricaneDunc
quote:

5% Conventional


You'd better be one pristine borrower to qualify at 5% down conventional. I know the program is there but lenders are very wary of 5% down loans these days.



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Posted by Cajun Revolution on 12/26 at 10:23 pm to LSUAfro
quote:

Also, FHA is 3.5% and I wouldn't put down a penny more if you don't have to.


Is this a good strategy? I have no intention of seeing this entire mortgage through to the end unless I keep it as a rental property. I just want a mid-level starter home package.

Is it best to pay the least amount up front? I'm just trying to get a saving/budgeting strategy for the next year.



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Posted by LSUAlum2001 on 12/27 at 9:53 am to Cajun Revolution
You can put down 0.

PMI is a bitch, but there are ways around having to pay it.



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Posted by Bear Is Dead on 12/27 at 9:58 am to Cajun Revolution
I would go for 20% to avoid PMI. It will add up to be alot of $.


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Posted by LSU1018 on 12/27 at 10:07 am to Bear Is Dead
I would only buy if you can put 20% down. PMI is so high right now. People on here will tell you to do an RD loan bc it's 0 down but just run the numbers for an RD loan compared to a conventional and compare closing costs for the 2.


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Posted by mytigger on 12/27 at 10:14 am to Cajun Revolution
whatever you do try to pay it off quickly... minimum amounts and extended load periods make you end up paying double actual price of the home.


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Posted by notiger1997 on 12/27 at 10:20 am to mytigger
quote:

try to pay it off quickly


No. The interest rates are so damn low right now. Don't want to pay off early. Just use the extra money to pay off other debt or to invest.



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Posted by Cajun Revolution on 12/27 at 10:27 am to notiger1997
Ideally, I stay in the house 3-5 years until I marry and upgrade. Then I flip the property or rent it out. Least amount of up front cost the better the way I'm thinking.

This post was edited on 12/27 at 10:28 am

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Posted by dustinm27 on 12/27 at 10:43 am to Cajun Revolution
quote:

whatever you do try to pay it off quickly... minimum amounts and extended load periods make you end up paying double actual price of the home.


If the OP is not planning on staying there long, why should you pay anything but the minimal possible? Put down as little as you can and spend as little of your own money as you can. Your house will likely appreciate and you can make money when you sell it.

ETA: The only time you should every pay off anything quickly is if you plan on keeping it your whole life or it is an item that depreciates (like a car)


This post was edited on 12/27 at 10:46 am

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Posted by seawolf06 on 12/27 at 1:11 pm to dustinm27
quote:

ETA: The only time you should every pay off anything quickly is if you plan on keeping it your whole life or it is an item that depreciates (like a car)


Agreed, plus he didn't convert those payments back to present value.

The RD loans do have a fee that gets added to the loan value. The income ceiling is also a factor.

I've heard of 80/15/5 loans where you take loans out to pay the 20% down and avoid PMI.



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Posted by Tiger at Law on 12/27 at 2:02 pm to Cajun Revolution
I recently bought a house with a 5% down payment on a conventional loan. Did an upfront PMI payment that came out to just under 3 total years of monthly PMI payments instead of paying it until a 78% LTV...Figured I would pay some now and have lower monthly payments for the life of the loan. I plan to be int he house for a long while


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Posted by TigerTatorTots on 12/27 at 8:26 pm to Cajun Revolution
I put down 20% to avoid the PMI. I would set a goal to do the same. However, I believe you can put down as low as 5%


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Posted by mytigger on 12/27 at 8:38 pm to dustinm27
quote:

ETA: The only time you should every pay off anything quickly is if you plan on keeping it your whole life or it is an item that depreciates (like a car)



I disagree. Anytime you can pay a lesser price for something that's always a smart move.

$200,000 loan at 4% over 30 years will cost $343,000.

quote:

Put down as little as you can and spend as little of your own money as you can.


No, you're paying an extra $143,000 to borrow $200,000. Spending 171% of the purchase price to pay less today so you can to spend more tomorrow.

Now, take that same $200k over 15 years and you end up spending $266k, saving yourself $77k in the process, in addition to the equity that you've paid into the house.




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