Poll: buying a house, how much $ downpayment

[FoBoT]

would you put 5% downpayment on the house,
or pay off all the other debts and get a few nice pieces of furniture to go with the nice house and go with a 0% down loan ?

NOTE** VA loans don't require PMI/Private Mortgage Insurance, so that isn't an issue . by going VA , i get the same deal as a conventional loan, but without 20% downpayment

 

[Metalloid]

Depends, what is the interest on your other debts?

 

[Gyrene]

Get debt free. That's the most important thing, IMO.

 

[FoBoT]

Originally posted by: Metalloid
Depends, what is the interest on your other debts?

student loan is about 6% rate. this loan is about 2% of the house price/about 35% of our cash

CC's are about 14-15% rate, maybe a little less. balances are about 1% of the house price/about 20% of our cash

car is about 8% ( i forget , i'll take that as homework). this loan is about 2% of the house price/about 35% of our cash

house will be just under 6% rate

 

[VictorLazlo]

Can you pay-off your CC and still make the 5%?

According to Suze Orman, student loans are "good debt". They generally have a good interest rate, and you shouldn't loose sleep over paying them off.

I would recommend paying-off the CC only, and keeping the van and student loan payments. As soon as you have enough money for the 5%, then go for it.

 

[Vic]

The absolute best reason to go VA is for the 0% down with no MI and still a great fixed rate.

I don't get your figures though. The VA funding fee should be 2%, and the max loan origination fee your lender can charge is 1%. Is that how you're getting 103%?

If you qualify for VA, then I strongly recommend the 0% down path and to pay down all your other debts with the cash you would have used for the downpayment. That 5% equity will be nothing if your other bills get in the way of your lifestyle or of decorating your new home the way you want it. Absolutely remember to keep "rainy day" money set aside as well. Preferably at least 3 months of what you need to live.

 

[Rudee]

Put down as much as possible.

 

[FoBoT]

Originally posted by: Vic
The absolute best reason to go VA is for the 0% down with no MI and still a great fixed rate.

I don't get your figures though. The VA funding fee should be 2%, and the max loan origination fee your lender can charge is 1%. Is that how you're getting 103%?

If you qualify for VA, then I strongly recommend the 0% down path and to pay down all your other debts with the cash you would have used for the downpayment. That 5% equity will be nothing if your other bills get in the way of your lifestyle or of decorating your new home the way you want it. Absolutely remember to keep "rainy day" money set aside as well. Preferably at least 3 months of what you need to live.

yes, going VA eliminates the PMI so our house payment will be roughly $100 a month less than otherwise

the sheet my lender gave me showed the VA funding fee as 3% for 0% down and 1.5% for 5% down and 1.25% for 10% down, i'll have to double check that

if we go with our 5% down plan, we will have $1000 for a rainy day fund , if we go 0% down, we can boost that to about $2500 or maybe $3000 depending on how restrained we are with buying new furniture. not quite the 3 month rule. up to now we have been renting/living paycheck to paycheck (the $ for this house buy/downpayment money is coming from selling stock options from a job i had 5 years ago, a nice bonus )

 

[NogginBoink]

If putting down 5% will strap you for cash, don't do it.

You will be astounded at your first few months' worth of expenses making your new house a home.

The cashier at Home Depot, for instance, will not say, "have a good day!" but will instead say, "see you tomorrow!"

 

[Papagayo]

Sounds like you are not ready financially to purchase a house. You ought to move into an apartment and start saving and paying your debt first.
It's always good idea to put down 20%, because this eliminates your PMI insurance, which means lower mortgage..

Not sure about the VA loans..

I'm sure it's guaranteed, but it's not the lowest interest rate..

 

[rmrf]

Originally posted by: Papagayo
Sounds like you are not ready financially to purchase a house. You ought to move into an apartment and start saving and paying your debt first. It's always good idea to put down 20%, because this eliminates your PMI insurance, which means lower mortgage.. Not sure about the VA loans.. I'm sure it's guaranteed, but it's not the lowest interest rate..

VA loans do not have PMI.

 

[FoBoT]

Originally posted by: NogginBoink
If putting down 5% will strap you for cash, don't do it.

You will be astounded at your first few months' worth of expenses making your new house a home.

The cashier at Home Depot, for instance, will not say, "have a good day!" but will instead say, "see you tomorrow!"

well, the good news is that the house is only 2 years old and so i shouldn't have to hit HD too much. mainly we want to get a new bedroom set/bed and put our old one in the guest room and get a new kitchen table/chairs. our clothes dryer needs either some work or replacing, it squeeks really bad

 

[richardycc]

0% toward the house, and once you are debt free, you should pay 2x or more of the monthly mortgage, it should make up for the 5% downpayment in no time. and pratice self control with your CC, or you might ended up with new CC debts, mortgage, and you will bad to square one + one more mortgage payment every month.

 

[SweetSweetLeroyBrown]

0% down?

What bank is financing home mortgages with 0% down? I thought only military veterans were able to obtain such financing.

 

[SweetSweetLeroyBrown]

oh you got VA nevermind

 

[CPA]

Originally posted by: Vic
The absolute best reason to go VA is for the 0% down with no MI and still a great fixed rate.

I don't get your figures though. The VA funding fee should be 2%, and the max loan origination fee your lender can charge is 1%. Is that how you're getting 103%?

If you qualify for VA, then I strongly recommend the 0% down path and to pay down all your other debts with the cash you would have used for the downpayment. That 5% equity will be nothing if your other bills get in the way of your lifestyle or of decorating your new home the way you want it. Absolutely remember to keep "rainy day" money set aside as well. Preferably at least 3 months of what you need to live.

This is all you need to hear. Vic is right.

 

[KarenMarie]

Put down as much as you can afford. Get as much equity in it as possible and own it as soon as possible.

 

[CPA]

Originally posted by: SweetSweetLeroyBrown
0% down?

What bank is financing home mortgages with 0% down? I thought only military veterans were able to obtain such financing.

You can still get 0% down loans, you just structure it differently. Essentially, you would get a second mortgage and go with a 80/20/0 loan. This also eliminates PMI (non VA loan). You may have to come up with a little towards closing costs, but usually less than 5%.

 

[FoBoT]

Originally posted by: richardycc
0% toward the house, and once you are debt free, you should pay 2x or more of the monthly mortgage, it should make up for the 5% downpayment in no time. and pratice self control with your CC, or you might ended up with new CC debts, mortgage, and you will bad to square one + one more mortgage payment every month.

that is a good point, with the other debt gone, we can increase our montly payment to the mortgage. if something changed at work, we could bump back down to a "normal" payment if needed. hmmm.... we could pay the 5% back into the mortage and not be paying the interest on the other loans. hmmm...

we went through the CC out of control thing about 10 years ago, we have that licked. it won't happen again. if we pay these off, we will keep only one CC account one card for each of us with only a $1000 limit, just enough to buy stuff online and use for gas when traveling and for buying airline tickets, etc

 

[CPA]

Originally posted by: KarenMarie
Put down as much as you can afford. Get as much equity in it as possible and own it as soon as possible.

Why continue paying interest (cc, car, other personal) that you can't deduct? Always pay off high, non-deductible interest first. Quick equity is not important if you plan on living in the house a long period of time.

 

[Vic]

Originally posted by: FoBoT
yes, going VA eliminates the PMI so our house payment will be roughly $100 a month less than otherwise

the sheet my lender gave me showed the VA funding fee as 3% for 0% down and 1.5% for 5% down and 1.25% for 10% down, i'll have to double check that

if we go with our 5% down plan, we will have $1000 for a rainy day fund , if we go 0% down, we can boost that to about $2500 or maybe $3000 depending on how restrained we are with buying new furniture. not quite the 3 month rule. up to now we have been renting/living paycheck to paycheck (the $ for this house buy/downpayment money is coming from selling stock options from a job i had 5 years ago, a nice bonus )

Ah... you were a reservist then? Is your Certificate of Eligibility green or yellow?

I still recommend 0%, shop around to a couple of lenders though for the best deal. I'll say it again, the best part of VA loans is the great 0% down financing.

 

[FoBoT]

Originally posted by: CPA

Originally posted by: KarenMarie
Put down as much as you can afford. Get as much equity in it as possible and own it as soon as possible.

Why continue paying interest (cc, car, other personal) that you can't deduct? Always pay off high, non-deductible interest first. Quick equity is not important if you plan on living in the house a long period of time.

i forgot that

our plan is to live in this house at least 5 years, but probably 15 years , when our youngest child will graduate high school and move out
the house is close enough to my wife's dream house that i think it is realistic. and there is enough space and land for us to do stuff (like i want to build a workshop/garage later)

my job situation is very stable and my wife will be going back to school this year, in about 5 years or so when she finishes her degree, she will be getting a full time job

 

[smashp]

I had Excellent credit and about 10% of the Purchase Price in cash. I was able to obtain a 80/20 loan and have the seller pay all closing Costs. i put 0 down and finaced 80% of the house at 5.79 30 year and the remaining 20% on an equity line of credit which is a variable prime plus a point.

This situation requires NO PMI payment.

thats right. NO money down, No PMI.

we used our 10% for a kitchen remodel, fixing up the house and furniture.

 

[FoBoT]

Originally posted by: Vic

Originally posted by: FoBoT
yes, going VA eliminates the PMI so our house payment will be roughly $100 a month less than otherwise

the sheet my lender gave me showed the VA funding fee as 3% for 0% down and 1.5% for 5% down and 1.25% for 10% down, i'll have to double check that

if we go with our 5% down plan, we will have $1000 for a rainy day fund , if we go 0% down, we can boost that to about $2500 or maybe $3000 depending on how restrained we are with buying new furniture. not quite the 3 month rule. up to now we have been renting/living paycheck to paycheck (the $ for this house buy/downpayment money is coming from selling stock options from a job i had 5 years ago, a nice bonus )

Ah... you were a reservist then? Is your Certificate of Eligibility green or yellow?

I still recommend 0%, shop around to a couple of lenders though for the best deal. I'll say it again, the best part of VA loans is the great 0% down financing.

no i was active duty, i don't know what color it is
i will check
sounds like i need to make sure my lender has his ducks in a row, i don't know how many VA loans he does

thanks everybody for the input
*EDIT*
my wife found the form/VA funding schedule

the difference is because we had a previous VA loan, first time VA for active duty is 2% , but for second time it is 3%

 

[CPA]

Originally posted by: smashp
I had Excellent credit and about 10% of the Purchase Price in cash. I was able to obtain a 80/20 loan and have the seller pay all closing Costs. i put 0 down and finaced 80% of the house at 5.79 30 year and the remaining 20% on an equity line of credit which is a variable prime plus a point.

This situation requires NO PMI payment.

thats right. NO money down, No PMI.

we used our 10% for a kitchen remodel, fixing up the house and furniture.

This is similar to what I did, though both of my loans are fixed and a slightly higher rate.