Financing in Teaneck>Question Details

Rdkt, Home Buyer in New York, NY

What is the standard downpayment on a house in Teaneck right now?

Asked by Rdkt, New York, NY Thu Mar 13, 2008

Is a 10% downpayment possible? We know now is a good time to buy but we probably cannot manage 20%.

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7
If you have good credit, and verifiable income and assets, you will be able to obtain a mortgage w/ 10% down at a competitive rate.

If your credit is average (vs. excellent) you may still be able to get a loan, but may find your purchasing power reduced due to higher interest rate.

If you have flaws in your credit, a short job history, or other factors which limit your credit worthiness, you may find that a larger down payment is necessary to obtain financing.
1 vote Thank Flag Link Mon Mar 17, 2008
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
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Dear Rdkt, there is no standard Down payment. The down payment is what you can afford to put up as collateral to purchase the property you seek. As a general rule you need at least 5% down. Also please let me add a comment about the LPMI in another answer posted. this tool is going out of favor as banks look to off set risk so loans are being approved because of the presence of PMI. Another option is payment of the insurance policy up front. Go to the sight attached for rates. The cost of the premium would be tax deductible if you pay it as oppose to the bank paying it' It is also much cheaper than monthly PMI premiums.
Web Reference: http://www.mi.genworth.com/
1 vote Thank Flag Link Mon Mar 17, 2008
You should walk into your local bank or contact the bank you do business with- there are still mortgage programs that are offered from Fannie Mae with 5% down- Your down payment counts when there are multiple offers on a property not so much in this market!
0 votes Thank Flag Link Wed Mar 26, 2008
As a top realtor in Teaneck with years of experience http://(www.barbaraostroth.com), I can tell you that 10% is just fine. The agent from Flushing gave you the best answer. Down payment serves three purposes: (1)a sum of cash that is deposited in the sellers' attorney's trust account till closing and makes the seller feel more comfortable about the buyer's intention to stick with the deal, (2) helps establish the start of the ratio of mortgage to equity, thus making the mortgage company feel better about taking a risk on the house, and (3) avoiding PMI if you put down 20% or more. In the past 8-10 years, with the escalation of home values, many buyers couldn't afford to put that much down unless they were rolling equity from the sale of a previous home or apartment. The good news is, once your home starts appreciating in value and you can prove to the bank that your equity has grown, you may be able to get rid of the PMI in a couple of years. In this market, with prices having gotten softer, the chances of buying at a good price and seeing value in your property are very good as long as you intend to stay put for at least 3-5 years or more. Give me a call, I know the Teaneck market well (along with this end of Bergen County) and would be happy to work with you!
0 votes Thank Flag Link Thu Mar 13, 2008
10% is common and just fine.

20% is great if you can afford it. but otherwise, 10% is a very good number. There is no standard number. There are a lot of people with good credit and 5% making deals becasue they know the marke is at a low and it is time to buy.

The 25% down better rate answer I disagree with. lenders are still willing to work with people and you WILL get a good rate with 10% down. Just go to a legitimate bank.
Mortgage Brokers are full of good stories, but I have seen few with good endings.
0 votes Thank Flag Link Thu Mar 13, 2008
Hi Rdkt,

May I suggest you think of it more like a funding formula rather than a "standard" downpayment? For example:

3% down, 97% financing (PMI insurance required)
5% down, 95% financing (PMI insurance required)
10% down, 90% financing (PMI insurance required)
20% down, 80% financing (PMI may or may not be required per lending stipulation)
25% down, 75% financing (No PMI insurance required, better interest rate)

The more down payment, the better the financing package. I usually do a presentation for my clients explaining afordability by three different rules:

1. The Income Rule (e.g. borrorer's monthly expenses cannot exceed income specified by the lender).
2. The Debt Rule (e.g. total housing expenses, exisiting debt plus new mortgage debt/ratio).
3. The Cash Rule (e.g. must have cash sufficient to meet down payment and settlement costs, moving costs and survive to eat well, fix the car, pay for unexpected life expenses, maybe decorate the place, etc).

A good loan for a borrower is one that you're not just willing to pay, but it's one you have the ability to pay and not lose your shirt or investment if something unexpected crops up. There is really no standard anything, it's more like each individual will find a financing package that meets their criteria and needs while conforming to the cash on hand. Just because you can put down 25% doesn't mean you have to.

Regards, C.
Web Reference: http://www.TannStarr.com
0 votes Thank Flag Link Thu Mar 13, 2008
There is no standard down payment. It all depends on your situation and ability. You can buy a house with 10% down, as long as you are approved for a mortgage for the balance. You may have to pay PMI (private mortgage insurance), but speak to your lender. Many have programs for this type of down payment.. I know Coldwell Banker has a lot of programs to work with a buyer that has this type of down payment. I have worked with many buyers that havea smaller down payment and it can definitely be done.
Please contact me if you would like more information.
Good Luck.

Sharon Kozinn
Web Reference: http://www.sharonkozinn.com
0 votes Thank Flag Link Thu Mar 13, 2008
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