Posted by
Message
scott8811
LSU Fan
Shreveport
Member since Oct 2014
2808 posts

First time homebuyer
As the title says, I am looking to buy my own house and would love some insight.... google really hasn't been my friend on this one as there is lots of conflicting stuff.

We are in our 20's and each have about $10,000 in savings. My main concern is with the downpayment/closing costs, as the note would likely be less than we pay in rent.

I have heard I should expect to pay 20-30% down, but have also seen I could pay as little as 3%. What is the norm? Are there pitfalls to a low down payment other than a higher note? What the hell am I doing?

TIA


OldSouth
LSU Fan
Folsom, LA
Member since Oct 2011
9542 posts

re: First time homebuyer
Ask the guys on the money board. You'll regret asking that here.


Replies (0)
Replies (0)
270
Displaced
LSU Fan
Member since Dec 2011
23602 posts

re: First time homebuyer
Money board will be better help to you.


Replies (0)
Replies (0)
51
Paul Allen
Notre Dame Fan
Montauk, NY
Member since Nov 2007
54539 posts

re: First time homebuyer
quote:

We are in our 20’s


quote:

What the hell am I doing?


No clue


Replies (0)
Replies (0)
92
kengel2
LSU Fan
Team Gun
Member since Mar 2004
12763 posts

re: First time homebuyer
You a veteran?


Replies (0)
Replies (0)
00
Salmon
USA Fan
On the trails
Member since Feb 2008
63477 posts

re: First time homebuyer
quote:

Are there pitfalls to a low down payment other than a higher note?


if you don't have 20% for a conventional loan, you will have to buy mortgage insurance called PMI, which will add to your monthly bill

but the PMI will go away eventually

I put down 3%, remodeled my house, refinanced, and had enough equity in my house to remove the PMI within 3 years



jbgleason
LSU Fan
BTR, suck it all you haters
Member since Mar 2012
10748 posts

re: First time homebuyer
Avoid the temptation to blow all your savings and max out your note to get more house. This is known as being house poor when you are struggling month to month just to meet your mortgage. Unlike renting, when the AC goes out or a pipe bursts it is you and not the landlord that needs to come up with the cash. Be ready for that.


Replies (0)
Replies (0)
110
SilverStallion
Houston Astros Fan
Member since Aug 2017
1999 posts

re: First time homebuyer
I’m too lazy to explain everything, but if all you each have is 10k in savings, that really isn’t a smart idea to buy a home. Just my 2 cents
This post was edited on 12/7 at 8:26 am


kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
52304 posts

re: First time homebuyer
quote:

We are in our 20's and each have about $10,000 in savings. My main concern is with the downpayment/closing costs, as the note would likely be less than we pay in rent.


Contact a local non profit housing counseling agency where you live. There are down payment and closing cost assistance programs you likely would qualify for.

I work in this industry. IF you need help finding one, tell me where you live.


Replies (0)
Replies (0)
30
The Mick
LSU Fan
Member since Oct 2010
36219 posts

re: First time homebuyer
You can get FHA financing for as little as 3% I believe. Ask a realtor, they'll have the info for you. Everyone on this board is full of shite.


Replies (0)
Replies (0)
111
Displaced
LSU Fan
Member since Dec 2011
23602 posts

re: First time homebuyer
Generally, you want to avoid PMI if you can which requires a larger down payment, but that also depends on your lending institution.

I was able to avoid PMI on a 30 year conventional loan with only 5% down (although we had more to put down)


Napoleon
New Orleans Saints Fan
Kenna
Member since Dec 2007
56806 posts

re: First time homebuyer
Ot ballers will say never put down less than 30%.
Honestly you can put down as little as 3% but you'll pay an extra $100-250 in monthly insurance called PMI.
You can refinance the house later and take equity out and get rid of the pmi.
The situations differ based in need and area. Though very very few first timers in today's market can come up with 30%.


The Mick
LSU Fan
Member since Oct 2010
36219 posts

re: First time homebuyer
quote:

I was able to avoid PMI on a 30 year conventional loan with only 5% down
How?


AUsteriskPride
Auburn Fan
Albuquerque, NM
Member since Feb 2011
16101 posts

re: First time homebuyer
You usually need 20% down for a conventional home loan. Less than that, you will probably have to get an FHA loan which carries PMI. The PMI premiums are tax deductible though, and if you get the loan, you can get it removed by paying more each month towards the principal. Once the loan is at 80% of appraised value, you can request it be removed, at 78% it is automatically taken off.


Displaced
LSU Fan
Member since Dec 2011
23602 posts

re: First time homebuyer
Isn't it the FHA loan that require you to refinance once you have the equity to remove PMI? If doesn't drop off automatically?


WG_Dawg
Georgia Fan
Atlanta
Member since Jun 2004
69798 posts

re: First time homebuyer
I was a first time homebuyer 12 months ago. A lot of thigns you learn as you go but yeah the money board will be a good resource.

As for money down, of course 20% is ideal but if you don't have that it's not the end of the world. As mentioned you can do an FHA loan for like 3.5%, but of course you're gonna end up paying more monthly.

As for the other questions, that's simply a personal choice and what you are comfortable with.


Replies (0)
Replies (0)
10
LSUBoo
Houston Astros Fan
None. None More Black.
Member since Mar 2006
75983 posts

re: First time homebuyer
quote:

I have heard I should expect to pay 20-30% down, but have also seen I could pay as little as 3%. What is the norm? Are there pitfalls to a low down payment other than a higher note? What the hell am I doing?


Like someone said, if you don't have 20% down, you'll have to pay PMI as part of your note, and yes obviously the base note will be higher as you are financing more of the cost.

I would guess that most people in your situation don't have 20% to put down. I didn't on my first home. It's not the end of the world.

As far as closing costs, you can likely get most of them paid by the seller, but you'll still have to come out of pocket some.


Displaced
LSU Fan
Member since Dec 2011
23602 posts

re: First time homebuyer
Financed through NFCU


Salmon
USA Fan
On the trails
Member since Feb 2008
63477 posts

re: First time homebuyer
with interest rates so low, not putting 20% down isn't nearly as bad as it once was



Replies (0)
Replies (0)
60
AUsteriskPride
Auburn Fan
Albuquerque, NM
Member since Feb 2011
16101 posts

re: First time homebuyer
quote:

I’m too lazy to explain everything, but if all you each have is 10k in savings, that really isn’t a smart idea to buy a home. Just my 2 cents



That's not true. They can probably get a mortgage cheaper than rent payments, receive tax benefits, and if done correctly, will start building equity quickly.

My wife and I paid 5% down on our first home, I put a little sweat equity in the house, sold it for 35% profit 4 years later.

The main concern is buying a house you can afford. Just because you qualify, does not mean you should purchase it. Live well inside your means on a first time home purchase.
This post was edited on 12/7 at 8:32 am


first pageprev pagePage 1 of 4next pagelast page

Back to top

logoFollow TigerDroppings for LSU Football News
Follow us on Twitter, Facebook and Instagram to get the latest updates on LSU Football and Recruiting.

FacebookTwitterInstagram