For all the home owners out there did you all put down the recommended 20% of the home price or did any of you successfully get a good mortgage with a very little or no downpayment? We are about to get our first mortgage and just curious to hear from real people about it and not just take what the banks may tell us
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We put down 5% I believe. If we had to put down 20%, we would be waiting forever to save up that much. We didn't have any assistance with our down payment (I have friends whose parents gave them money, etc), so it took us a little while just to save up that 5% plus closing costs.
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We did an FHA mortgage so we only did 3.5% down. Our interest rate is only 3.3%, which is great, but we do have to pay PMI each month.
It would be worth it to sit down with someone and go over all your loan options--we got our mortgage through our credit union, and the loan officer was really helpful. She showed us several different loan scenarios, which helped us choose which was right for us.
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@aprild: thanks! Did you feel that affected the interest rate you were given?
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@MediaNaranja: oh ok thanks. yes we will be going in to talk over our options with a couple different banks
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We also did FHA with 3.5% and still got a low interest rate. If you're a first-time buyer, definitely look into it.
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@Mrs. Yoyo: Yes we are a first time buyer, thanks for that
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@Mrsbells: I think our interest rate was right at 4%, which is pretty good compared to how high they have been in the past. We have to pay a PMI, but it goes away once we pay off 20% of the house.
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We did FHA at first then within a few years refininaced out of it when our house appraised for more.
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@aprild: @808love: ok thanks! all very helpful info!
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@Mrsbells: Check the PMI rules. I thought they changed it so you may be stuck with it for a certain amount of time now. But I am not sure.
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@808love: ok thanks. I'll write down a list of questions to ask
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We did an FHA and put down 3.5%. 30-year loan at 4.75%. A few years ago we refinanced to a 15-year loan at 2.75%
ETA: We did have to pay PMI for both loans, and it ended up being more expensive with the 15-year loan, but we recently hit 20% equity and no longer have to pay PMI.
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We put 5% down- we were hanging on to our original home to rent out and did not have the equity to reinvest. Not a problem.
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@Adira: @youboots: ok thanks ladies!
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We put 8% down on an FHA loan at 3.75% interest rate. I honestly do not know too many first time homeowners my age that was able to put down 20%! That was 4 years ago, and we are working towards getting the 20% equity to get rid of PMI payments!!
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We put 10% down and our interest rate was under 4% as well (in 2011.) Our agent/mortgage lender seemed completely fine with it!
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We didn't put down 20% and had PMI with our first place. It didn't affect our interest rate, just our monthly payment. We pretty quickly got the equity and refinanced to get the PMI gone (we bought in the pit of the market and it recovered quickly where we live).
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In our area houses are just too expensive for a first time home buyer to put down 20%.
We bought at the tail end of 2011 when interest rates were super low. We got an FSA loan at 3.25% interest and put down 3.5%. We paid PMI the first 3 years but then refinanced and because our house value had increased so much we were able to get rid of the PMI.
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I think it depends where you live! Houses are very expensive where we live but the market is so competitive they never accepted our offers with less than 20% down. There were just too many offers that the seller could be very picky to what loan looked the best. Which was often all cash
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We got an FHA loan and put 3.5% down. We got a good interest rate (can't remember off the top of my head). We obviously pay PMI also so that's something to consider.
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Thanks everyone!
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It’s not going to be difficult to get a low interest mortgage with less than 20% down, if that was your concern. Getting *no PMI* without 20% down will be the problem, although there are lenders (including some credit unions) who will waive PMI with a 10% down payment (or other amount as determined by the individual lender and of course, your credit score).
You’ll want to really look at the PMI rules, the cost to refi out of PMI if you end up having to do that or paying for an appraisal to get out of PMI in order to determine whether it makes more sense to continue to save to avoid PMI, to borrow from another source (like your 401k, a family member, etc.) or to just buy with PMI, knowing that’s an additional expense for some period of time.
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@yoursilverlining: ok that make sense. thanks
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For our first home we put 10% down. I am not sure if that effected our interest rate on the balance of the mortgage, but ours was rather low. We of course had to pay PMI until our equity position improved to 20%.
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I think I only put down 3.5 or 5% for the first house I bought as a single person. After we got married, our first place bought together we had a 20% down payment (Dh's first house).
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@Mrsbells: We did an FHA loan for our first home and put 3.5% down. It was a lifesaver. We would not have been able to otherwise. I believe you are capped at $300K for a FHA loan - so if you look above that price point you wont be able to do an FHA. Also - houses have to go through an FHA inspection which can come with some extra nits/nats. i.e. my sister had to have cement stairs repaired when she sold her home bc it would not pass the FHA inspection otherwise.
Also - I believe some years ago the PMI rules changed. Previously, when you had an FHA you could petition to have your PMI dropped once your LTV (loan-to-value) dropped below 80% (maybe it was 78%)...this essentially means the bank was as protected as a 20% down mortgage...I do not believe you can do this anymore. I think to get the PMI off you have to refinance.
FWIW - my first home was $212K purchase price and my PMI was around $100 maybe $125 per month.
Our second home we put down 15% as we needed the rest to finance our renovation and we had some PMI again but our interest rate was good. We refi'd to get rid of the PMI once all the renovations were done.
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Per google: FHA's loan limit floor -- which is 65% of the Federal Housing Finance Agency's conforming loan limit -- is still $271,050. The ceiling will also stay at $625,500. The administration calculates loan limits annually by using a value worth 115% of the median home price in each area
and on canceling PMI:
http://themortgagereports.com/7570/fha-mip-cancel -
we put down 20% because we had it and we felt comfortable with where that would put our monthly payments. we could have saved the cash to put into renovations (Lord knows we need to do more work!) but this also made sure we didn't blow through that cash (which we would have if we had it available to us!)
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@Mrsbells: There are programs (TD bank... I think the program is called "Right step/start" ) that has a first home owners loan where you only need to put 3% down and no PMI.
There are income requirement and/or you have to buy a home in low income areas.
https://www.tdbank.com/mortgages/affordable-home-loans.html
My sister lives in a big city so she was able to qualify for a program like this with low down payment and no PMI. I think she got her mortgage through Citibank.
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On the PMI front, you also may be able to get it rolled into your rate (probably not through FHA though). I did this with my last purchase as I didn't qualify at the time for the tax deduction of PMI. My payments were the same, but my interest rate was higher and fully deductible. Of course the only way to rid myself of that was a refinance as well.
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We live in the DMV, so smaller down payments are common where even townhomes are $400k and up. And that's not even close in lol. We put down 3.5%, 30 year loan, 3.25% interest rate.
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Thank you all so much for your comments. I feel like I understand my options a bit more now and will feel more confident when speaking to lenders
@Mrs D: @808love: i'll do additional research on the FHA limits. we are looking into new construction so additional inspections hopefully shouldnt cause too many issues.
@bluestriped bee: Thats good to know, I'll look into it but the area we are lookiing to buy is definitely not low income, we really focused on a neighborhood with high school ratings.
@MamaG: ok thanks, I didnt even know that was an option. I'm learning a lot on these boards -
@Mrsbells: Oh, a realtor told me to look into a mortgage broker that specialized in FHA loans. He said they usually can expedite FHA quicker because they know exactly what is needed to get the loan approved. We are currently waiting a few months to buy a home and when I do I'll reach out to the realtor to get the name of the broker.
Oh, yeah, we were looking in areas that were not low income and also we make too much money so that program is pretty much off the table for us.
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@bluestriped bee: oh ok thanks! I didnt know there were mortgage brokers like that. I'll get down to researching for those in or area
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We did a 3% down with no PMI. Also, it was a conventional loan, not FHA. Our interest rate was a little higher doing no PMI and our interest rate could've been a tinier better if we did 5% but it didn't work out that way. I live in MA and MA offers a lot of mortgage options. We did talk to a second broker but they didn't offer less than 5%.
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@Eko: ok I'll ask and see what the best possible option will be for us
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We put down 20%. and our mortgage is manageable. we are in LA, so that 20% was hard to come up with, but we didn't see any other option..
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