is %3 a good down payment for a starter home for a young family?

Asked by Taryn Gavelis, Boston, MA Fri Mar 4, 2011

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Marita Topmi…, Agent, Indianapolis, IN
Fri Mar 4, 2011

You can buy FHA for 3.5% down or more. Conventional mtg with
no PMI is 20% down. Some banks still have special "First Time Buyer" loans with 0 down.
Check with your lender. Better yet, find a good Realtor and tell him/her how much you want
to put down and ask for lender recommendations.

Good Luck, Marita
1 vote
David Zucker…, , Frederick, MD
Mon Mar 7, 2011
I think the down payment is less relevent than your comfort with the monthly payment and whether you perceive that it is a good time to purchase a home. Assuming you want to purchase in Boston you can purchase any house for only 3.5% down using FHA. There are also many fantastic opportunities buying a Fannie Mae owned property with 3% using the HomePath loan program. Keep me in mind for any renovation loan programs that you may need help with. I can be reached at (866) 552-5912.
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Mar 4, 2011
Yes most lender require at least 3.5% or more !

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes
Jen Butel, Agent, Austin, TX
Fri Mar 4, 2011
I agree with Marita about exploring Fannie Mae Homepath financing on Fannie Mae properties. They require 3.5% with no PMI (mortgage insurance to secure a loan with a low downpayment). Ask your agent to recommend a lender. Don't forget about closing costs. When we bought our first home many years ago, we were surprised when we had to show up with $5,000 in addition to our downpayment to close. We had minimal representation, and really could have benefited from an agent explaining what to expect.

Best Wishes,
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Mar 4, 2011
It really depends on your overall financials; if you haven't visited with any qualified loan officer(s) yet, consider doing so--after reviewing your information, he/she can determine qualification, the type of loan, how much, how much down. etc.
0 votes
J R, , New York, NY
Fri Mar 4, 2011
I suppose it depends on how much the home costs. Frankly, I'd rather wait until I had more to put down. When I bought my first house I put 20% down. OK, the house was only $60,000, but in 1978 it took a lot of saving to accumulate $20,000. I would seriously save up more.
0 votes
Dan Tabit, Agent, Issaquah, WA
Fri Mar 4, 2011
It really depends on so many factors. In an appreciating market it would be better, but in a depreciating market you could be underwater in a matter of months. Ideally, 20% down puts you in a good equity position, allows you to avoid costly mortgage insurance and may provide a lower rate.
Sit down with someone you know and trust who is good with their finances and work through some options. Have enough in reserve for expenses such as repairs to the home or cars, being ill and other things you may not expect.
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