House buying?

MinM · August 2009

How much $ is considered typical when you are talking about a down payment for a home? Like 10% of the purchase price of the home, plus a bunch of fees?

PMeg819 · August 2009

Well, you can get an FHA loan where you only put down 3.5%. People generally put 10-20% down. Keep in mind, the more you have down means your monthly payment is less.

TheDuckis · August 2009

20% of the purchase price plus fees. If you put down less than 20% you need to take out a second mortgage for the difference, usually at a much higher interest rate. This could have all changed since I bought my house.

NOLABridesmaid · August 2009

Yeah, don't forget those darn fees for closing.

DG1 · August 2009

usually 20% plus closing costs (usually around $2500, give or take $1000).If you're buying your first home, there are some other options, like 0% FHA loans, but that's one of the things that screwed a lot of people in the current crisis. Sortof a "buy now, pay later" mentality.Also, sometimes you can get the seller to pay closing costs, esp. if you're in a serious buyer's market.

MinM · August 2009

Yes, that is true Meg. Thanks, Megatron. H and I need to start saving because we hope to own a home in the next couple years once we know where we are going to settle down. I'd liked to know what we should aim for so as to keep him realistic.

PMeg819 · August 2009

I don't think FHA will let you do 0% anymore. At least it wasn't an option when we were talking to the lender. I think our closing costs are coming in around $10k.

MinM · August 2009

This will be our first house, so I'll be all up in everyone's cheese asking all sorts of stupid questions.

ilovewhoseweddingisitanyway · August 2009

Nope. For FHA, you have to do atleast 3.5% now.

*Barbie* · August 2009

we got a 0% down, 30 year fixed rate, and negotiated that the sellers pay a majority of closing costs (with a $ value of up to 3% of the sale price).we only had to take out one loan and we got a good rate. if you put down less than 20%, you'll need to pay mortgage insurance, until you've paid 20% or your house appraises for x% more $ than the original sale amount. we bought our house in 2007, so not sure what has changed since. we decided to put 0% down and save the money for home improvements and emergencies.

*Barbie* · August 2009

Also, your closing costs will vary by region, price of home, etc. DG's estimate of 2500-3500 is really low for east coast - ours were around $11,000-$12,000.

PMeg819 · August 2009

Agree with Barbie. No matter what type of loan we got or how much we put down, we were looking at least 8k for closing costs. On a side note, if you can buy a house now try to. We are getting 3% of the purchase price back at closing, so we probably won't pay anything at closing. And for those of you who are USAA members, check out Mover's Advantage through them. We are getting $950 in cash after closing just for using this program and their realtor. We really like our realtor too.

DG1 · August 2009

holy crap on those closing costs! I didn't realize that varied so much by region.And really, min, just save as much as you can to give yourself as many options as possible when you end up wherever you end up. Your home price is really going to depend on where you live. I mean, look at PMeg's new house. Then think of what you could get for that money just about anywhere else (a 1-2BR condo, maybe). It's not just extremes like Des Moines vs. NYC. Our house and lot are in a nice enough suburb, but move it 20 miles west, and the price/cost would easily double for the same acreage and square footage.

DG1 · August 2009

Oh - and I was on Money Matters just a day or two ago, and someone supposedly got a 0% FHA loan. In any case, the lending practices that got us into this mess are not entirely gone, you know? Just be smart. And you've got a couple of more years before you're planning to buy, yes? So for now, just save save save and think about the details later when you know more about what you need and where you'll be.

Cant_wait! · August 2009

We went through FHA, and 0% was not an option. Closing costs were around $7000, but the seller paid them all (and the seller was technically a bank, so that was awesome). So in the end we only had to put down 3.5%. We have to pay PMI, but that should go away in a year or two and isn't bad. Also, some cities are offering "stimulus" things right now. Be sure to check into that. The city we moved from was offering one, but ran out right before we purchased.

ReturnOfKuus · August 2009

We did 20%.

House buying?

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