I want to purchase a home for at least $200,000. I have $25,000 saved. Should I purchase now while rates are low or wait until I have $40,000 the 20%?

Asked by Netta, Philadelphia, PA Fri Oct 18, 2013

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Timothy Garr…, Agent, Philadelphia, PA
Fri Oct 18, 2013
Hi, Netta.

Congrats on making the decision to buy a home!

If you're looking for some more direction, it helps to speak to someone who would represent you as a Buyer Agent. Your Buyer Agent will provide direction/advice, schedule any/all showings, and help you navigate through the home buying process.

If you would like to chat about this further, I'm here to help. All of my contact information is below.


Timothy M. Garrity | REALTOR®, ABR®, e-PRO®, SRS®
U S Spaces, Inc. | 2206 Walnut St. Philadelphia, PA 19103
Licensed Real Estate Salesperson, PA | #RS314897
267-879-2716 - Call & Text
215-829-8850 - Office
1 vote
Great info!
Flag Tue Mar 25, 2014
Sheri Curci, Agent, Newtown, PA
Mon Oct 28, 2013
If you want to drop the monthly PMI (Private Mortgage Insurance), then you can wait until you have the 20% down or 40,000. However, many lenders can be a bit more flexible this year then they have been since the crash. I would contact a mortgage company or bank and go over your various options with them. Interest rates have gone up and they can continue to go up, and houses prices have increased in value and that too will play a factor in your decision. Mostly all of last year rates were in the 3.25-3.5% range. Now they are in the 4.25 -4.5 range .Good Luck
0 votes
Amanda Chris…, Agent, Fort Wayne, IN
Sun Oct 20, 2013
I would consider purchasing sooner than later. Interest rates are still pretty low today. You won't know how things will be in the future. Don't do it unless you are 100% sure though. Good luck!
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Sun Oct 20, 2013
My thoughts are you'd be better moving forward now than waiting till you have the full 20% down. Both home prices and interest rates are likely to go up over the next year or two.

Depending on how long you think you're going to be in the house (Statsically it's unlikely to be more than 7 years) I'd suggest looking at either a 5 or 7 year ARM bot of which you can get in the low to mid 3% range right now. You can alos probably find a 30 year fixed without PMI in the range of 4.75%
0 votes
Mike Bottaro, Agent, Warrington, PA
Sun Oct 20, 2013
Buy now while rates are low. I work with plenty of lenders that offer a 3% down conventional loan, NO PMI !! Although it feels nice to pay a mortgage on a lower balance, the likely hood of rates and sale prices or homes increasing will most likely offset you saving in the meantime to capture 20% for a down payment.
0 votes
Philip J. Cu…, Agent, Feasterville, PA
Sat Oct 19, 2013
Buy now there are programs that are available for less then 20% down and just because you have $25.000 that doesn't mean that you can use it all for a down payment you still need closing cost and Experts say you should use other peoples money. Pick up a copy of Rich Dad Poor Dad. Call me in my office 215-725-5700 X49

Philip J. Cunningham Sr.
V.I.P.Realty Corporation
7942 Bustleton Ave
Philadelphia, PA 19152
215-725-5700 X49
Web Reference:  http://WWW.GreatPaRE.com
0 votes
Joe Biachima…, Agent, Philadelphia, PA
Sat Oct 19, 2013
As a Realtor, I'm giving my Son, who is also looking for a property, the same advice to purchase now. The rates are the lowest since the 1960's. There is also a strong prognosis that property values will increase in the future. The demand for affordable housing is sure to increase as the population continues to grow. Also, there is a standing tax deduction where the federal government allows a mortgage interest deduction for home owners. If you are a first time home buyer, there is an ADDITINAL tax refund you may be eligible for if you qualify. Lastly, why would you want to pay for your Landlord's mortgage and build his equity when you can do this for yourself. There are mortgage options out there where there is no mortgage insurance and do not need to wait until you have 20% down. Netta, there is an old real estate saying, "Don't wait to buy real estate, buy then wait". I can be reached anytime on my cell if you want to discuss your otions with no obligation.
Joe Bianchimano Broker Owner ReMax 2000 267-228-2853
0 votes
Barbara Smith, Agent, Marlton, NJ
Sat Oct 19, 2013
Good Morning Netta,

If you find a home in the area you want that has most of the features you want, that is also in your price range, I'd go ahead and make the purchase. Remember, this is where you are going to live and if you find a place that checks off most of the boxes for you, that is the most important thing to consider.

Beyond that, consider how long it will take you to save an extra 15k. If the interest rates tick up even slightly, over the life of the loan the extra 15k would be totally wiped out. And and extra $15k down payment would only save you a few dollars every month on a mortgage payment.

Again, keep the actual home and your level of enjoyment living there at the top of your list. You wouldn't want to pass something up now that is perfect for you and regret it later. However, if you are not finding what you are looking for, you'll have more time to save some additional funds.

Good luck and enjoy shopping for a new home!

Barbara Smith
Weichert Realtors
Direct: 609-980-7593
email: BarbSmith321@gmail.com
Web Reference:  http://GetMovingWithBarb.com
0 votes
Kathy Hanigan, Agent, Huntingdon Valley, PA
Sat Oct 19, 2013
Hello Netta,
Please call me at 214-327-8104 we so can discuss this further. I look forward to hearing from ou.
Kathy Hanigan, Broker
0 votes
Kathy Hanigan, Agent, Huntingdon Valley, PA
Sat Oct 19, 2013
Hello Netta,
Please contact me at 215-327-8104 so we can discuss this further.
Kathy Hanigan, Broker
0 votes
Danielle Gur…, Agent, Philadelphia, PA
Fri Oct 18, 2013
Hello Netta!
You have been contacted by many knowledgeable agents. Keep in mind that an important element of choosing a Realtor is that you are looking for someone with whom you can build a professional relationship and you can connect with; your agent needs to be able to understand what your looking for and dedicate sufficient time getting you to the perfect place. Don't be handed a list of open houses to check out.

That being said, yes now is an optimal time to buy as others have said. There are many lenders with programs to cater to buyers with good credit and reserved funds. You will not need 20% to buy. I have a two loan officers who offer a variety options for buyers depending on their needs and profile. My office also has an in house short sale attorney who provides his services at no cost to the client should you decide you are interested in a home up for short sale. We have our own title company as well. Throughout the entire process Remax will guide you and refer seasoned professionals when needed including home inspectors, insurance agencies, and more. If you are interested in speaking and/or meeting please contact me!

Happy House Hunting!

Danielle R Gurst
Remax Affiliates
0 votes
Netta, Home Buyer, Philadelphia, PA
Fri Oct 18, 2013
thank you all for the great feedback. I am a first time homebuyer trying to figure out the home buying process. If you left your contact info I will be in touch
0 votes
Hi Netta,

Here's a link that will give you some really good resources on the home buying process! https://www.guaranteedrate.com/buying-home/vpname/derekbayer
Feel Free to contact me with any questions.

Best of luck.

Derek Bayer
Flag Mon Oct 28, 2013
Jonathan Unr…, Agent, Lansdowne, PA
Fri Oct 18, 2013
Haha looks like I came late to the party. Lots of great advice. Buy now while rates are low. You can get more house now rather then later! Email me what your looking for and we can go look at houses. There is no fee for using my professional services. Talk to you soon!

Jon Unrath
Weichert Realtors Media
267 968 1505
0 votes
R. Eric Axel…, Agent, Cherry Hill, NJ
Fri Oct 18, 2013
Hi Netta, I would advise purchasing now. Home prices and interest rates are rising. You don't NEED 20% in all cases. Let's speak about what you are looking for and see if there are any 10% conventional options that include a competitive interest rate.

Eric Axelson, Associate Broker
Kurfiss Sotheby's International Realty
856.617.1212 m
Web Reference:  http://SellingPhilly.com
0 votes
Susan Breault, Agent, Philadelphia, PA
Fri Oct 18, 2013
Hi Netta,

You asked a great question and it is a good time to buy. Interest rates are at a 30 year low. It would be a good idea to check a few things first. I would suggest that you go to annualcreditreport.com for your Free Credit Report from all 3 credit reporting agencies (and yes it is for free) Check and make sure that there isn't any incorrect information and if there is, you have 30 days to dispute the report. Do this before you go to a lender. Next would be to get pre qualified for a mortgage. FHA has low rates and low down payment. I would be happy to put in touch with some lenders and help you with your dream of owning a home. My goal is to take the stress out of home buying and selling.
I hope you found this helpful and feel free to contact me.

Kind Regards,
Sue Breault
Keller Williams
215-205-9643 - cell
0 votes
Dora Lekas, Agent, Fountainville, PA
Fri Oct 18, 2013
I would buy now rather than wait if I were you,
There are lenders who can structure loans to eliminate the Private mortgage insurance as long as your credit is good and you qualify for 200,000.00 loan

Dora Wurst
Prudential Fox And Roach Realtors
215-348-1700 ext 136
215-588-2880 cell

Cell is the best number to reach me
Thank you
0 votes
James G Brop…, Agent, Phila, PA
Fri Oct 18, 2013
Because the home values have been on the downward cycle for over 5 years and are just now starting to see increase in value and if for no other reason, that would indicate now is a good time to buy a home. Rates were also at an all time low and are also now rising is another reason why jumping in now might be good advice. Waiting until you had 20% saved as dn payment is uncertain as to when this would happen?

I would think that buying now would be the best advice and if rates improve and values increase in the future you can always re-finance. By the way, with $25,000 available that is enough to purchase with 3.5 to 5% dn payment(maybe even a little more) and the balance will be pretty much eaten up by closing cost, depending on how hight the real estate tax may be?

Remember, if you were to buy a home for $200,000, 20% dn = $40,000 plus approx $12,000 to $15,000 closing cost, depending on taxes. That means you need more then double the amount you have right now so all logic says to buy now.

Jim Brophy
Associate Broker
RE/MAX 2000
0 votes
Pamela Warner, Agent, Ardmore, PA
Fri Oct 18, 2013
Hi Netta,

My advice is to buy now. There are many options for buyers that don't involve PMI and you would have a great rate for as long as you have the mortgage. There is Seller's assist, and also a small second mortgage until you have paid that off. 1% interest is the equivalent of approximately $20,000 in purchasing power, so while you are saving cash, you're loosing money if you don't buy now. If you have any questions you can call me.
0 votes
Leon Aksman"…, Agent, Philadelphia, PA
Fri Oct 18, 2013
Don't forget you'll still need closing costs. Seller assist can help. Rates are looking good now, though higher than before they're creeping down again just abit. Great time to buy if you can do, save money with a good negotiator agent on your side to get a great sale price before the market goes over-board again, get some seller assist, strike while the iron is Hot and make a great purchase!
0 votes
Thank you very much I did not factor in closing cost I am a first time homebuyer
Flag Fri Oct 18, 2013
Michael R. T…, Agent, Souderton, PA
Fri Oct 18, 2013
If your goal is to just avoid mortgage insurance by putting 20% down, I have access to a mortgage program that does not have mortgage insurance with just 10% down. This way, you know what prices and rates are doing. Unfortunately, my crystal ball is In the shop so you never know what can happen down the road. Let me know if you would like more information.
0 votes
Christopher…, Agent, Langhorne, PA
Fri Oct 18, 2013
Hi Netta. Because rates are so variable, it is beneficial to take advantage of lower rates. If you are a first time home buyer, I know of a program that does not charge pmi. Email me at cblouch@kw.com
0 votes
Don Sherman, Agent, Philadelphia, PA
Fri Oct 18, 2013
Hello Netta;
With the rates rising, the prices are also rising.So in my opinion the answer is to purchase now.
I use a loan officer who has a program for people with very good credit scores that allow as little as 3% of the purchase price downpayment with no PMI (Mortgage insurance).
If you would like to discuss your options further, feel free to contact me.Would be happy to represent you in your purchase.
Don Sherman
Century 21 Advantage Gold
Email-realtor94@gmail. Com
0 votes
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