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I currently rent from an Invitation Homes property in Seattle. I'd dearly love to buy the place from them (sketchy hedge-fund backing aside, it is a gorgeous h

by lwhalen 11y ago

I currently rent from an Invitation Homes property in Seattle. I'd dearly love to buy the place from them (sketchy hedge-fund backing aside, it is a gorgeous house that is well-maintained), but they ain't selling and my rent has a 'guaranteed' increase of 5% per year, with the agent telling me to 'expect closer to 10-15%, unless I sign a multi-year lease'. Definitely a drag, but ye gods and little fishies is it difficult to put together a 10% downpayment for a mortgage. Median home prices around here are $300k-$450k, and $30k in cash is quite the chunk of change.

hkmurakami 11y ago
Wait, I was the under the impression that the minimum downpayment was increased to 20%. Am I misremembering?
- ianstallings 11y ago
  The amount of down payment needed is determined by a lot of factors and can be as low as 5% AFAIK (not including FHA backed loans where only 3.5% is required). Now I'm not a financial advisor, but imho putting more down is generally better because you'll pay less in financing costs.
- bkjelden 11y ago
  below 20% you usually need mortgage insurance (PMI) in the US. PMI is usually not too expensive with 10% down - for example when I bought a house with 10% down, the PMI was 1% of the loan value up front. When you consider the time it would take a family to double their down payment savings, it can make sense in high cost markets. You can go as low as 5% down, but the mortgage insurance gets a lot more expensive. The general guidance is still 20%, though, because you're less likely to go underwater, and it shows you're committed to the idea, the area, etc.
  - w4 11y ago
    As of January you can even go down to 3% for a conventional mortgage: http://www.latimes.com/business/la-fi-fannie-freddie-loans-20141209-story.html http://www.latimes.com/business/la-fi-fannie-freddie-loans-2...
- sgk284 11y ago
  Anything under 20% generally requires mortgage insurance, which gets added into your monthly payment. It's a trade off of larger monthly payments for a smaller downpayment.
- briandear 11y ago
  For investment, non owner-occupied houses, that's generally the case. You can get 3.5% down for certain FHA programs.
- pessimizer 11y ago
  I'd guess that the median down payment is more like 5%.

by lwhalen 11y ago

hkmurakami 11y ago

Wait, I was the under the impression that the minimum downpayment was increased to 20%. Am I misremembering?

ianstallings 11y ago
The amount of down payment needed is determined by a lot of factors and can be as low as 5% AFAIK (not including FHA backed loans where only 3.5% is required). Now I'm not a financial advisor, but imho putting more down is generally better because you'll pay less in financing costs.
bkjelden 11y ago
below 20% you usually need mortgage insurance (PMI) in the US. PMI is usually not too expensive with 10% down - for example when I bought a house with 10% down, the PMI was 1% of the loan value up front. When you consider the time it would take a family to double their down payment savings, it can make sense in high cost markets. You can go as low as 5% down, but the mortgage insurance gets a lot more expensive. The general guidance is still 20%, though, because you're less likely to go underwater, and it shows you're committed to the idea, the area, etc.
- w4 11y ago
  As of January you can even go down to 3% for a conventional mortgage: http://www.latimes.com/business/la-fi-fannie-freddie-loans-20141209-story.html http://www.latimes.com/business/la-fi-fannie-freddie-loans-2...
sgk284 11y ago
Anything under 20% generally requires mortgage insurance, which gets added into your monthly payment. It's a trade off of larger monthly payments for a smaller downpayment.
briandear 11y ago
For investment, non owner-occupied houses, that's generally the case. You can get 3.5% down for certain FHA programs.
pessimizer 11y ago
I'd guess that the median down payment is more like 5%.