Down payment question - Challenge post :o)

JBs_Bride

DH and I just finished filling out our preapproval application. We hope to get our preapproval letter some time next week.

We are thinking about putting down 30-35% down. 

 Sort of an unscientific poll, but what percentage of your home's cost did you end up putting down? I am wondering if this is a normal percentage...

MrsC968

In a high cost of living area (HCOL) such as Boston and its suburbs, most people can't even get to 20%. So 30-35% is amazing! Good job on saving so much. The more you put down the lower your monthly payments will be. Just make sure you still have a decent savings account. You don't want to deplete the whole thing and have no money left for new furniture, lawn care items, if something breaks in the house or even car repairs.

We put down a little over 5% on our SFH in the burbs.

kates2480

That's great!

we put down 10% and left the other 10 in our account for closing costs and stuff for the house, we didn't want to not have a savings for if/when we needed it.

PunkyBooster

I don't know of anyone who can afford to put more than 0-10% down in this area.

MrsT2008

ditto the others - in this area most people can't afford to put even 10-20% down - good for you for having 30+%!

We put down 10%

jCamsquared

Wow, that is an awesome down payment! Like the others said, much higher than most people can do in this area. We put about 10% down.

HarwichBride08

That's great we put 3.5% down but we have FHA. 

camedowncrushing

Technically we put 0% down.  We bought in 2005 when 0% down mortgages were available...I am pretty sure you can't get them anymore.  We had to give 5% upfront, but got it back at closing. 

jess123456

Very impressive that you are putting down so much.  We put down 20% in 2007 ... Of course kicking ourselves that we didn't wait until everything crashed in 2008 but who can see the future right? 

mesa81

I think we put somewhere between 5-8%... I can't remember for sure.

Rock-n-Voll

We put down over 30% as well. As you've already seen in the responses so far, this is definitely not the norm.

There are two schools of thought on this.  One is that you're basically guaranteed a rate of return that equals your mortgage rate, as that's what you'll be avoiding paying in interest.  The second is that perhaps you should put down less so that you can put that money to work elsewhere (i.e. other investments, not other expenses).

jenvalet

We are putting 20% down.  30% is awesome, especially around here.  We struggled with 20%, but decided that if we couldn't put that much down, we weren't ready to buy. 

JBs_Bride

Thanks for the information and advice, ladies. This is the first condo that I'm buying (DH has bought and sold other units on his own) so I want to learn more about this by myself.  We're definitely saving 25% of our allocated house money to pure savings. DH is a big saver and I'm a recent convert. lol

We're thinking maybe an above average DP is necessary since we're looking to buy in Boston proper...

Rock-n-Voll

JBs_Bride:

We're thinking maybe an above average DP is necessary since we're looking to buy in Boston proper...

It's not "necessary."  20% down payment is typically what you need in order to avoid PMI (private mortgage insurance), but really the bottom line is that your minimum down payment is the difference between what you're offering to pay for the place and what a lender will loan you.

If you haven't already, I'd take a look at 100 Questions Every First Time Home Buyer Should Ask, Mortgages for Dummies, and/or Home Buying for Dummies.  I'm sure there are parts you'll be able to skip over, but I think the biggest challenge in the ownership process is not even knowing what you don't know.

JBs_Bride

Rock-n-Voll:

JBs_Bride:

We're thinking maybe an above average DP is necessary since we're looking to buy in Boston proper...

It's not "necessary."  20% down payment is typically what you need in order to avoid PMI (private mortgage insurance), but really the bottom line is that your minimum down payment is the difference between what you're offering to pay for the place and what a lender will loan you.

If you haven't already, I'd take a look at 100 Questions Every First Time Home Buyer Should Ask, Mortgages for Dummies, and/or Home Buying for Dummies.  I'm sure there are parts you'll be able to skip over, but I think the biggest challenge in the ownership process is not even knowing what you don't know.

Thanks for the tips on the books! I'll have to make a note of those for my next trip to Borders.

HarwichBride08

JBs_Bride:

Thanks for the information and advice, ladies. This is the first condo that I'm buying (DH has bought and sold other units on his own) so I want to learn more about this by myself.  We're definitely saving 25% of our allocated house money to pure savings. DH is a big saver and I'm a recent convert. lol

We're thinking maybe an above average DP is necessary since we're looking to buy in Boston proper...

 

We bought a 2 bedroom loft in Boston Proper in 2008 and it wasn't necessary.   Awesome if you have it though.

MrsMcC091909

We put down about 13%... PMI sucks.