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Saving up for a downpayment on a house
- Thread starter jmcoreymv
- Start date
dullard
Elite Member
Normally trickery and now that trickery is going to bite many people hard. Very hard.
But sometimes the trickery is very simple and won't harm you. For example, just get a loan for the 20% down payment. As long as you can afford the loan and the mortgage, you are set. The problem comes when you CAN'T afford either or both of them.
But sometimes the trickery is very simple and won't harm you. For example, just get a loan for the 20% down payment. As long as you can afford the loan and the mortgage, you are set. The problem comes when you CAN'T afford either or both of them.
I went 103% for my first house (the one I live in now). 80/20 30 yr fixed and bought all of the points for the 80 and built it into the financing. I break even on that after 4.5 years. I only had somewhere between 14-17% saved up and the PMI on an 83-87% loan would have killed me. I saved money by financing the whole thing and putting the down payment in my pocket. I paid all of the closing costs and walked with the rest.
I love it. I'd consider the implementation of it to have been perfectly executed.
I love it. I'd consider the implementation of it to have been perfectly executed.
CombatChuk
Platinum Member
The 80/20 loan is pretty popular with getting around having a downpayment.
mitaiwan82
Platinum Member
I believe a lot of housebuyers in CA get a interest-only mortgage with little or no down payment
They aren't really negotiable and they'll give you a list of expected closing costs up front. Just don't get a jackass for your home inspector and you'll be fine.
You will have to pay the closing costs out of pocket, so have money saved up for that. Closing cost me somwehere between 8-10k here...
pontifex
Lifer
this is something i was wondering also. there's no way in hell i'd be able to scrounge around for like 10-20k for a downpayment on a house and it would take me my entire life to get that much with my current wages and bills.
of course, once my car and student loan payments are done, i would have like an extra $473 a month, which would help a bit. i have about 2-3 years on the car and probably a good while left on the student loans.
of course, once my car and student loan payments are done, i would have like an extra $473 a month, which would help a bit. i have about 2-3 years on the car and probably a good while left on the student loans.
mattpegher
Platinum Member
If you cannot get the 20% down you may be able to put down 10% then get a home eguity loan for the other 10%, usually at a higher rate. Are we talking regular or jumbo?
Wow I didn't realize closing costs were that much, I thought a couple grand at most. I went to a few online mortgage calculators and a 400k loan 30 yr fixed will cost me 3k a month after real estate taxes and insurance. I was hoping I could rent out two of the rooms to help offset the cost.
1) renting isn't a steady source of income and wont be used by the banks to determine whether you qualify or not.
2) Dude, the list of crap you have to pay for is rediculous. Escrow for the good faith deposits, a year of homeowners insurance up front, home inspector, radon testing, land title fees, RE transfer taxes, etc etc...
Glavinsolo
Platinum Member
80/20 loan. To avoid PMI you get a mortgage then a private loan for the down payment.
mattpegher
Platinum Member
I don't know, I hear the prices in CA are through the roof and a jumbo is still only 350K+, I think.(?)
pontifex
Lifer
how much do i make a month after taxes but before bills?
i make about $1795 a month before i pay any bills.
after bills are paid (i still live at home so i don't pay rent) i bring home about $900 a month, maybe a little less. i could afford maybe an apartment but not much else after that.
Personally, so long as rates stay reasonable(6% for a 30 year fixed is reasonable), I'd stretch my home financing as far as the bank allows. Split it 80/20 and save the down payment. PMI is almost completely avoidable now if you aren't sub prime. All it does is bump up the rate a bit on the second loan. But at least that is deductible while the PMI is not.
Use your down payment to put towards consumer debt(CC's, cars, ect) if you have it or just bank it for a rainy day fund...or start your Roth IRA's and begin saving for retirement.
If you want to save on interest, plop down an extra $100 or $200 a month and pay it off 5 years earlier that way.
At these rates, you can do much more with that downpayment than it will save you in morgage interest.
(This advice fully assumes you plan on being there for a while, zero equity will burn you if you have to sell within the first few years)
Use your down payment to put towards consumer debt(CC's, cars, ect) if you have it or just bank it for a rainy day fund...or start your Roth IRA's and begin saving for retirement.
If you want to save on interest, plop down an extra $100 or $200 a month and pay it off 5 years earlier that way.
At these rates, you can do much more with that downpayment than it will save you in morgage interest.
(This advice fully assumes you plan on being there for a while, zero equity will burn you if you have to sell within the first few years)
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