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YAHT: How much down payment is recommended?

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Monthly PMI premiums vary greatly by location, property type, loan amount, loan-to-value, loan terms, and credit rating. I've seen premiums anywhere from $10 to $300. The largest drawback to PMI is that it is not tax-deductible. This is why people will often take out higher-rate 2nd mortgages to avoid it, even though the payment savings is usually a wash.
The ideal smallest down payments are 3% for FHA and 5% for conventional. Smaller downs are available but will worsen the loan terms.
 
Originally posted by: Ornery
From the 2 calculators I looked at, one and two, the cost of living is only 2 - 5% different between those two areas.
Click to expand...

Sure but those sites does not go in to detail (maybe I missed it).
This site gives a more detailed information and it matches my impression from my visit.

The most important info for me are these:
Cost of Living Indexes Natl. average:       Tucson, AZ         Charlottesville, VA
Overall       100                                                 99.3                     121.8
Housing     100                                                 96                        171
House purchase cost: $128,500                 $118,700              $208,300
 
Great edit flot.

That made me think even more. Paying ~$800 - $900 in rent might not be that bad afterall.
This really needs some serious investigation.
 
Renting is not THAT bad unless it is for long term. In the short term, your mortgage payments/other loans that you used to buy a house will simply pay the interest and hardly touch the principle. But for long term, your house will appreciate and you will make a serious dent in that principle if not pay it off completely.

I don't feel like renting is all that bad. You either throw your money at a landlord or throw your money into interest unless you bought a property that needs some serious fixing to make it appreciate.
 
Originally posted by: FrustratedUser
Looks like there will be no more money spent on expensive road and mountain bikes in the near future.
😉
Click to expand...

Well then forget it. Bikes are always more important. 😀
 
Just another note, I *am* pro owning a house, despite my rant above. 🙂

But, for me, owning the house means I have a place to park my jet-ski, a garage to work in, etc. When I was looking at buying a condo, it was just ridiculous. (in addition to other fees, some buildings around me wanted $200-$250 a month for the "condo fee" to do things like building maintenance etc).

Also, another thing to remember is that you WILL have a ton of incidental expenses with a house. You're either going to be buying a $200 lawnmower, or paying somebody $20-$40 a month to do it for you. And then your water heater breaks, and you're out another hundred bucks. Oh, and apartment life usually covers things like pest control... Etc, etc, etc.

Now if you LIKE doing things like mowing the lawn, spraying for bugs, figuring out what that noise is in the attic, home ownership is for you. Me, I'm all for it, but my friends think I'm nuts.

Now if you can't imagine what you'd do if you woke up one day and your air conditioning wasn't working... well...
 
The online estimators told me I could afford between 60k and 90k. I bought a house for 145 and am comfortable. I make around 50k, but the reason the estimators were so far off is that I didn't have any money for downpayment or closing costs. I bought my house at 6.5% with a total of $800 out of pocket for closing and down.
 
Originally posted by: radioouman
Renting is not THAT bad unless it is for long term. In the short term, your mortgage payments/other loans that you used to buy a house will simply pay the interest and hardly touch the principle. But for long term, your house will appreciate and you will make a serious dent in that principle if not pay it off completely.

I don't feel like renting is all that bad. You either throw your money at a landlord or throw your money into interest unless you bought a property that needs some serious fixing to make it appreciate.
Click to expand...

That's why you do an ARM so that you get as much equity as you can in your home as fast as you can...otherwise it is more like you're paying interest only which is just like paying rent...

The only difference with owning is when it appreciates you gain that appreciation...
 
Originally posted by: Shanti
The online estimators told me I could afford between 60k and 90k. I bought a house for 145 and am comfortable. I make around 50k, but the reason the estimators were so far off is that I didn't have any money for downpayment or closing costs. I bought my house at 6.5% with a total of $800 out of pocket for closing and down.
Click to expand...

You can't get anything for 145k with 3 bedrooms anywhere close to where I work...🙁

 
Recommended? 20%
Minimums will depend on what the lender requires.

Be sure to keep your debt down. They will look at this very carefully to determine how much you can afford. It would be wise to speak to a mortgage broker upfront to see how much you'd qualify for. You could ask a realtor, but remember their job is to sell houses. A mortgage person can only sell a loan to a qualified applicant.
 
Originally posted by: FrustratedUser
Originally posted by: CrazyDe1
PMI is like 200-300 bucks a month...depending on the cost of your home... I couldn't justify doing that...
Click to expand...

If it's that much I'd say I agree.
Click to expand...

It varies depending on the size of the loan.
 
Originally posted by: FrustratedUser
Looks like there will be no more money spent on expensive road and mountain bikes in the near future.
😉
Click to expand...

Don't forget to have cash on hand to pay closing costs. On a purchase you can't wrap the lender fees into the loan. I'm looking at $3,500 to my lender alone.
 
Originally posted by: dirtboy
Originally posted by: FrustratedUser
Looks like there will be no more money spent on expensive road and mountain bikes in the near future.
😉
Click to expand...

Don't forget to have cash on hand to pay closing costs. On a purchase you can't wrap the lender fees into the loan. I'm looking at $3,500 to my lender alone.
Click to expand...

Yeah...forgot about that. I used buyer incentives to cover that.

Chris
 
Yeah there are many extra costs that come into play when owning a house. I do not look forward to mowing the lawn.
I do like to have a garage to mess around in and I already need it at the moment. A one room apartment is not enough for what I need to do. (Fixing maintaing the bikes, build R/C boats).
 
Originally posted by: CrazyDe1
Originally posted by: Shanti
The online estimators told me I could afford between 60k and 90k. I bought a house for 145 and am comfortable. I make around 50k, but the reason the estimators were so far off is that I didn't have any money for downpayment or closing costs. I bought my house at 6.5% with a total of $800 out of pocket for closing and down.
Click to expand...

You can't get anything for 145k with 3 bedrooms anywhere close to where I work...🙁
Click to expand...
Housing costs aren't too bad in Southern Oregon.
Ours is a brand new 1500 sq ft. 3 bdrm with a decent sized front yard and a pretty small back yard. Now that we've had it a year, similar houses in the neighborhood are going from 175k to 185k. Not bad for one year's appreciation.
And we only ended up with 800 bucks out of pocket for closing, down payment, etc.
 
i know someone who's been looking in Ny, Brooklyn for 2 family, 1-2 detached garage, private drive way kind of thing, brick house... okay areas... 690 to 730k easily, even upwards... imagine paying 20pct on that...140k, phew

lot size is only about 30 wide by 100 deep.

but you can rent 1 floor for about 1.6k per month...
 
Originally posted by: FrustratedUser
Originally posted by: Ornery
From the 2 calculators I looked at, one and two, the cost of living is only 2 - 5% different between those two areas.
Click to expand...

Sure but those sites does not go in to detail (maybe I missed it).
This site gives a more detailed information and it matches my impression from my visit.
Click to expand...
Wow, this thing is way off. And it's old. I compared where I live now to my hometown. Not only did Indiana switch to a 6% sales tax earlier this year, but to say that housing in Biloxi, MS is 10% cheaper than it is here in Bedford, IN is a *joke*. It's more like 60% more expensive in Biloxi.
 
Originally posted by: Chaotic42
Originally posted by: FrustratedUser
Originally posted by: Ornery
From the 2 calculators I looked at, one and two, the cost of living is only 2 - 5% different between those two areas.
Click to expand...

Sure but those sites does not go in to detail (maybe I missed it).
This site gives a more detailed information and it matches my impression from my visit.
Click to expand...
Wow, this thing is way off. And it's old. I compared where I live now to my hometown. Not only did Indiana switch to a 6% sales tax earlier this year, but to say that housing in Biloxi, MS is 10% cheaper than it is here in Bedford, IN is a *joke*. It's more like 60% more expensive in Biloxi.
Click to expand...

Should it be adjusted up or down?

<---- Hopes for down.

 
Originally posted by: FrustratedUser


Should it be adjusted up or down?

<---- Hopes for down.
Click to expand...
Well, I don't know about Northern VA, so I can't comment on that specifically. Biloxi, MS is an area of really high growth. If you find a good $80,000 house in Biloxi, you'd be wise to buy it. Property on the beach has gone from a few thousand dollars per acre to a few million in some places.
The only thing I can think of is that it's considering other parts of the county as Biloxi. It underestimated the cost of living in Biloxi, in my opinion.


 
i know you can ask, and see what they say, but seperate from that, are there ways to research if somebody died in the home you are looking to buy?
 
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