Poll: buying a house, how much $ downpayment

[AlienCraft]

Originally posted by: 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 ?

Pay off all CC debt. Cut all cards except one. Keep Van payment. (interest is deductible) Keep Student Loan but accelerate payment.( don't know tax ramifications)
Keep old furniture for 1 year and sort out what the immediate household requirements may be. Buy quality furniture at discount / sale. Don't buy new crap.
Buy a freezer and buy food / meat in bulk and freeze it. Keep discretionary spending to a minimum for the first year and try to pay up on your home loan. (You can make payments to the principal without fee , no?)
At the end of 1 year, re-finance and take no cash out.
JMO, YMMV.

 

[Vic]

Originally posted by: FoBoT
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%

Ahh... just checked my guidelines. 3% funding fee on subsequent use loans with less than 5% down is correct
I still say to go for it, given your particular financial picture. 1.5% extra fee in return for no MI is a bargain, and 5% equity is nothing compared to getting your debts paid down and having a little cushion in the bank. If your credit is excellent, you may want to check out the pricing/payments on some 80/20/0 loans though.

btw, interest on automobile loans is not tax deductible.

 

[MBony]

You actually might look into putting 10% down instead of 5% if you can afford it. I have grown up around real estate and thats what most people do. It will keep the monthly mortgage down as well. And that is always a good thing.

 

[FoBoT]

Originally posted by: Vic
If your credit is excellent, you may want to check out the pricing/payments on some 80/20/0 loans though.

btw, interest on automobile loans is not tax deductible.

our credit is ok , but not "excellent" , we are improving it and paying off these other debts should bump it up some more

 

[Dedpuhl]

My stepdad is a disabled vet. He is buiding a house that is almost $220K and the VA is paying a nice chunk of it. I don't know the interest rate. The only thing that sucks is EVERYTHING is nitpicked by the VA and it has to be completely handicapped accessible in case he is completely confined to a wheel chair.

 

[dman]

I dunno, a house is nice, but, 5% shouldn't be a challenge. Perhaps you should set your sites a bit lower and plan on moving in a few years... odd's are if this is your first house you won't like it after a few years anyway.

 

[thomsbrain]

Originally posted by: dtyn
Get debt free. That's the most important thing, IMO.

he won't be debt free, you fool, he'll have a huge ass mortgage over his head AND it will be higher because he was greedy now.

put the 5% down, take the lower rate, then work on paying off your other debt, and use the old furniture for a while. it will save you a crapload of money down the road.

edit: actually it sort of depends on the rates and amount of your other debt. why don't you just sit down and work it out mathmatically? see which will cost you more in the long run.

 

[CChaos]

I can't say I agree with that. Credit cards tend to have the highest rates and I'd personally rather get a good price on a house than a good rate considering you can refi down the road a bit.

I'll agree that we need more info before making an educated decision, but the typical 10%+ rates on a credit card balance make me ill.

 

[rh71]

If you're nowhere near 20% down to avoid PMI, 0% is better than 5% since the latter leaves you with next to nothing for no good reason.

 

[Yax]

Originally posted by: rh71
If you're nowhere near 20% down to avoid PMI, 0% is better than 5% since the latter leaves you with next to nothing for no good reason.

I agree. And don't listen to Suze Orman either. Check out Ric Eldelman's website and/or buy his book to help you out.

Do an interest only loan if you can. That's interest only for the first 15 years and then Interest plus principle the last 15. Take variable rate to get the lowest rate you can.

"Get the largest mortgage you can on your home and never pay it off" - Ric Eldelman.

Note: That doesn't mean buy the most expensive house! It means get the largest mortgage on the house you can afford to buy.

 

[Yax]

Originally posted by: thomsbrain

Originally posted by: dtyn
Get debt free. That's the most important thing, IMO.

he won't be debt free, you fool, he'll have a huge ass mortgage over his head AND it will be higher because he was greedy now.

put the 5% down, take the lower rate, then work on paying off your other debt, and use the old furniture for a while. it will save you a crapload of money down the road.

edit: actually it sort of depends on the rates and amount of your other debt. why don't you just sit down and work it out mathmatically? see which will cost you more in the long run.

I totally disagree. pay off the credit cards first, ALWAYS! Don't buy any furniture for a while or look for some second hand furniture first. Buy the good stuff later or you'll end up over your head.

 

[CPA]

Originally posted by: cheapbidder01

Originally posted by: rh71
If you're nowhere near 20% down to avoid PMI, 0% is better than 5% since the latter leaves you with next to nothing for no good reason.

I agree. And don't listen to Suze Orman either. Check out Ric Eldelman's website and/or buy his book to help you out.

Do an interest only loan if you can. That's interest only for the first 15 years and then Interest plus principle the last 15. Take variable rate to get the lowest rate you can.

"Get the largest mortgage you can on your home and never pay it off" - Ric Eldelman.

Note: That doesn't mean buy the most expensive house! It means get the largest mortgage on the house you can afford to buy.

Cheapbidder, what's Eldelman's book called. I have thought about the possibility of refinancing to an interest only loan, it's the mentality that I am not paying down the house though that's holding me back.

 

[TranceNation]

just want to emphasize the tax deductible part on your mortgage

 

[Vic]

Originally posted by: cheapbidder01

Originally posted by: rh71
If you're nowhere near 20% down to avoid PMI, 0% is better than 5% since the latter leaves you with next to nothing for no good reason.

I agree. And don't listen to Suze Orman either. Check out Ric Eldelman's website and/or buy his book to help you out.

Do an interest only loan if you can. That's interest only for the first 15 years and then Interest plus principle the last 15. Take variable rate to get the lowest rate you can.

"Get the largest mortgage you can on your home and never pay it off" - Ric Eldelman.

Note: That doesn't mean buy the most expensive house! It means get the largest mortgage on the house you can afford to buy.

Eldelman is an idiot. Buying a house simply for the tax deduction is not a wise financial move. If you think so, then give me a dollar so I can give you back a quarter.
And anyone who recommends an adjustable rate mortgage when fixed rates are at historic lows should be shot. Rates will go up. It's not if, it's when.
And whether you like it or not, as long as you owe on your house, all you have is expensive rent.

The biggest reason to buy a house is to establish and build wealth in an appreciating investment in real property. This means pay it off. Unless you want to be old and retired and unable to fully enjoy your retirement years because you piddled away your earning years and still have a sizeable and expensive mortgage on your home.
The other reason to buy a house is to fix in your housing expenses long-term. Rent always goes up. Fixed rate mortgages do not. Add in equity from appreciation that can be transferred from one home to the next, and you can improve your living conditions with little to no increased cost.

It's win-win across the board. You buy a house and fix in your largest monthly expense (housing) on an appreciating investment. During your earning years, the interest you pay on your house is tax deductible. Through proper planning and scheduling, you pay off the house shortly before you retire, when you will have LESS taxable income (and thus less need for the tax deduction).

Your largest personal expense in your lifetime will not be your house itself, but the interest that you pay on your mortgage.

 

[NogginBoink]

Originally posted by: 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

Just trust me on this. I promise.

 

[tgillitzr]

Originally posted by: NogginBoink

Originally posted by: 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

Just trust me on this. I promise.

I agree with NogginBoink. I just did an 80/20 with 0 down. Since I closed on the house, I have spent over 3K on various things. Ouch!