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A standard 30 year mortgage requires 20% down...what’s the percent of households that can put down $70k to purchase a home?
by will_brown 7y ago
A standard 30 year mortgage requires 20% down...what’s the percent of households that can put down $70k to purchase a home?
- eropple 7y agoI just posted similarly about down payments, but 20% seems to not generally be the case anymore. FHA loans are as low as 3.5%. I paid 5% down for a non-FHA loan. PMI is then a thing, of course, but you can get in the door. (This is not to say that down payments, as well as initial habilitability outlay, might not crushing. Our small, train-accessible single-family in the Boston area cost half a million dollars and we had to immediately gut the place for remodeling and for asbestos remediation, to the tune of $100K.)
- shemnon42 7y agoNot many first time home buyers do a standard mortgage now. Typically 3-5% is all that is needed. That and the lowest home mortgages rates anyone alive has seen have contributed to the home price increase. It's not the total value of the house but the amount of the monthly payment that is the driver, and 3% (today) vs 13% (early 80s) mortgage rates provide a huge swing.
- JMTQp8lwXL 7y agoIf the number of people that can afford to put down 20% has shrank significantly over time, won't the pool that can put 3-5% inevitably shrink as well? Will we return to 0-down homes? Where are down payments terminally headed?
- spamizbad 7y agoOK, but now you hold less equity in your home and you're paying PMI on top of that until you reach ~22% equity. There's no free lunch here.