Home Buying in North Olmsted>Question Details

s.j.reed1117, Renter in New York, NY

aprox how much of a down payment is needed or would be recommended?

Asked by s.j.reed1117, New York, NY Tue May 28, 2013

My wife and i have credit in the uper 600s and lower 700s and are looking to purchase a house/condo between 75-125 in about a year or two.

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7
Ideally, to get the best rate and terms you'd like to have 20% or more down. It depends on a lot of other factors as well. Find a reputable lender to talk to. Ask your trusted friends for a referral to a lender they know.
0 votes Thank Flag Link Wed May 29, 2013
We have a list of loan officers at local banks who give great service. It would be good for you to speak with a loan officer at two local banks to find out what you can qualify for. If you would like the list of loan officers at local bank please call me at 440-725-0910.
0 votes Thank Flag Link Wed May 29, 2013
there is a difference between a home and a condo. First, you will get a better interest rate (under current mortgage guidelines) if you put 25% down. A single family home should get you the same rate with 20% or more down. Do what you can to avoid PMI. Also, although FHA mortgages are easier to qualify for regarding credit scores they are a bit more difficult with condo financing if the condo is not a pre approved project with FHA.

You have some time. First, educate yourself on the pros and cons of condo ownership vs. single family home. If you have or plan to start a family a single with a back yard and room to expand may be a better long term investment. Second, put money aside every month to save towards your down payment. Just because mortgage guidelines say you qualify for a mortgage does not mean that you will be comfortable paying that mortgage. Third, be realistic with your budget. Make sure that you factor in all possible monthly costs that you will have as a home owner.

Good luck!
0 votes Thank Flag Link Tue May 28, 2013
If you can put at least 20% down you'll put yourself in the best position.
0 votes Thank Flag Link Tue May 28, 2013
A 20% down payment or more will get you out of private mortgage insurance (PMI) and may get you a lower interest rate, especially if you can get the credit scores above 720 by then.

That's not to say a 20% down payment is necessary. You can get an FHA loan with as little as 3.5% down.

I'd recommend speaking with a lender now to pull your credit report and identify any areas for improvement in the next 12-24 months. Like I said, the higher the credit the lower the interest rate you will qualify for.

I recommend only putting down as much as you can comfortably afford. Don't make yourself cash poor though. Remember you will still need money for paint, furniture, appliances, etc once you move in. If you use up all your cash and then have to open up credit cards at Home Depot and Best Buy then you're just robbing Peter to pay Paul as they say.

Hope this helps!
Tony
0 votes Thank Flag Link Tue May 28, 2013
You are looking at a minimal 3.5% down. You can get a conventional loan for 5+% down. Feel free to contact me. I work with an excellent lender that can guide you to the right loan/program. I'm also a buyer agent and 100% free to work with, I don't charge, "processing/junk fees." like other area companies so that saves you hundreds.


Cecilia Sherrard
RE/MAX NE Ohio
216-323-4620
http://www.YouShouldOwn.com
Web Reference: http://www.YouShouldOwn.com
0 votes Thank Flag Link Tue May 28, 2013
FHA loans require 3.5% down and conventional loans are about 10-20% down. Putting 20% down gets rid of extra monthly PMI or MIP insurance fees that remain for the life of the loan and if you stay in the house a long time they can add up. FHA loans are assumable but future buyers so when the rates go back up to 5, 6, 8 percent your 3.75% (for example) FHA rate will be very appealing to a buyer. You should sit down with a bank loan officer and discuss the options. It won't make much difference what they offer now sine you are 1-2 years away, but you will get a better understanding of the process and options. It's free too.
0 votes Thank Flag Link Tue May 28, 2013
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