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How much deposit do you need for a home loan in America?

2 points by Dramatize 16y ago

patio11 16y ago
Traditionally, banks required so-called "down payments" of 20% of the purchase price of the house (i.e. they were willing to finance up to 80% of the purchase price of the house, no more). At the height of the bubble, it was not uncommon to get mortgages with "no money down", i.e. with no down-payment (and 100% -- or more! -- of the purchase price of the house lent by the bank). These days norms are in a bit of flux: many banks will accept a nominal down payment (at, say, 5% of price) and charge an extra fee for private mortgage insurance (PMI) until your equity in the property exceeds 20% of the purchase price (that will take a number of years, typically, if you pay mortgages on the agreed-upon schedules). This insurance protects the bank in the event of your default. This is all negotiable (though some banks are more willing to negotiate than others).
- Dramatize 16y ago
  Thanks for the info. I missed out on the no down-payment loans here in Australia. 20% seems to be around the same as here now. The reason I'm looking at American property is you can buy homes in SF for significantly less than here. For example $350 for this: http://www.redfin.com/CA/San-Francisco/450-London-St-94112/home/1934372 http://www.redfin.com/CA/San-Francisco/450-London-St-94112/h... Compared to $550 for this: http://www.realestate.com.au/property-house-qld-albion-106861333 http://www.realestate.com.au/property-house-qld-albion-10686... In Sydney a property like that would be +$700k
  - tptacek 16y ago
    That house is tiny, looks to be in poor repair, and is in one of the worst neighborhoods in San Francisco (Excelsior, adjacent to Bayview, which is the worst neighborhood in San Francisco; I lived there for a few months). The median home sale price in Excelsior is $550k; and again, that's in one of the less desirable neighborhoods in San Francisco. If you can buy a house anywhere in the world, or even anywhere in the United States, for god's sake don't buy a crappy house in one of the most inflated real estate markets in the entire world. (FWIW, we put --- I believe --- 10% down on our house, 5 years ago).
  - organicgrant 16y ago
    Not to sound like a hater, but this is really a testament to how overinflated the SF real estate market is. A decrepit 100 yr old fisherman's shack is on the market for $350K. If you want to make the jump to the US, long-term visas aside, try Chicago, Boulder, Minneapolis, or anywhere in Northern California OTHER than SF.

2 points by Dramatize 16y ago

Traditionally, banks required so-called "down payments" of 20% of the purchase price of the house (i.e. they were willing to finance up to 80% of the purchase price of the house, no more). At the height of the bubble, it was not uncommon to get mortgages with "no money down", i.e. with no down-payment (and 100% -- or more! -- of the purchase price of the house lent by the bank). These days norms are in a bit of flux: many banks will accept a nominal down payment (at, say, 5% of price) and charge an extra fee for private mortgage insurance (PMI) until your equity in the property exceeds 20% of the purchase price (that will take a number of years, typically, if you pay mortgages on the agreed-upon schedules). This insurance protects the bank in the event of your default. This is all negotiable (though some banks are more willing to negotiate than others).

Dramatize 16y ago
Thanks for the info. I missed out on the no down-payment loans here in Australia. 20% seems to be around the same as here now. The reason I'm looking at American property is you can buy homes in SF for significantly less than here. For example $350 for this: http://www.redfin.com/CA/San-Francisco/450-London-St-94112/home/1934372 http://www.redfin.com/CA/San-Francisco/450-London-St-94112/h... Compared to $550 for this: http://www.realestate.com.au/property-house-qld-albion-106861333 http://www.realestate.com.au/property-house-qld-albion-10686... In Sydney a property like that would be +$700k
- tptacek 16y ago
  That house is tiny, looks to be in poor repair, and is in one of the worst neighborhoods in San Francisco (Excelsior, adjacent to Bayview, which is the worst neighborhood in San Francisco; I lived there for a few months). The median home sale price in Excelsior is $550k; and again, that's in one of the less desirable neighborhoods in San Francisco. If you can buy a house anywhere in the world, or even anywhere in the United States, for god's sake don't buy a crappy house in one of the most inflated real estate markets in the entire world. (FWIW, we put --- I believe --- 10% down on our house, 5 years ago).
- organicgrant 16y ago
  Not to sound like a hater, but this is really a testament to how overinflated the SF real estate market is. A decrepit 100 yr old fisherman's shack is on the market for $350K. If you want to make the jump to the US, long-term visas aside, try Chicago, Boulder, Minneapolis, or anywhere in Northern California OTHER than SF.