This is about what I made when I purchased my first home 2 years ago for $185,000. I put down 5% on a conventional loan at 3.75% interest. My monthly payments (mortgage, interest, taxes, PMI) are right at $1100/month.

Of course, this board will probably tell you that I spent too much for what I make and that I should have waited until I had 20% to put down. But I didn't want to live in a total dump, and I didn't want to wait until I was in my 30s to buy a house (Seriously, that 20% down rule of thumb is ridiculous). So I did what I did.

I make more now than I did a couple years ago, but even at a $51k salary, paying my note was not a problem. It just takes a little budgeting and self discipline. However, I had no other debt to worry about either. Also, I spent a lot of money furnishing the place. And I made sure I had the money to do that before I bought the house.

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Posted by autodd03

Clown world

Member since Dec 2013

2532 posts

Posted on 4/16/15 at 3:35 pm to PhiTiger1764

quote:
(Seriously, that 20% down rule of thumb is ridiculous)

20% down gives you a better interest rate with no PMI allowing your PITI to be much less of a monthly burden. In addition, having equity in your home allows you more flexibility in the event there is a downturn in the market. For instance, if you need to relocate, you won't need approval from the lender to sell the property short. If you put 5% down and the market goes down by 10%, you have to come to closing with the additional 5% (less any principle paid already). It is all about how much risk you feel comfortable living with not that one way is necessarily smart or dumb.

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