Is it better to put all my savings into a 5% down payment or just continue to rent to save enough for 20% down?

Asked by Mary, Morristown, NJ Fri Aug 31, 2012

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7
Joanne Berna…, Agent, Northfield, NJ
Tue Dec 11, 2012
The mortgage market is at historic lows! So is the interest rate you are earning on your savings! I think your best bet is to speak with your financial advisor and have them show you how much money you can save over the next 30 yrs. by buying a home at todays low interest rates. The numbers are staggering!
0 votes
Albert Baron…, Agent, Chatham, NJ
Sat Sep 1, 2012
I agree with all the answers below. If you qualify for a mortgage, then I would move forward as soon as possible. The housing market has hit bottom! Some markets have become,"Seller Markets".
I recently saw a 3 3/8 30 yr. fixed rate mortgage. Buy now and lock in a low rate.
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Wayne Odenbr…, Agent, Mountain Lakes, NJ
Sat Sep 1, 2012
Don't pay rent if you don't have to. Buy a place of your own! In a few years the rates may be up dramatically. You dont want to miss the low rates!
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Suzanne MacD…, Agent, Succasunna, NJ
Sat Sep 1, 2012
I think an even better idea would be to put 3.5% down on an FHA loan, keep the 1.5% in the bank in case some emergency comes up, and buy now! Interest rates have never been lower, prices are quite, quite good. If you wait to save another 15% for the down payment you could end up paying more than 15% in increased prices or due to a higher interest rate. I am a rather conservative person, but with the current climate, I say, no time like the present to buy a home.
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Steve Quinta…, Agent, Albuquerque, NM
Fri Aug 31, 2012
Look at it this way...Go with the 5% down and buy now. Put the money you would have saved for a down payment against the mortgage. You will gain equity faster and you will sooner be rid of mortgage insurance.
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Andrew Tisel…, Agent, Clifton, NJ
Fri Aug 31, 2012
It depends
You should sit with a Mortgage rep that can help guide you on how to improve your credit pay off debt
They will be able to tell you if you can do it now or should wait
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Lynda Hester…, Agent, Kinnelon, NJ
Fri Aug 31, 2012
Hi Mary
If putting down 5% uses up all your Savings - I would advise you to wait and save a little more- it is a great time to buy- but there are expenses to close- you have to escrow money towards taxes and insurance and you would be paying mortgage insurance or PMI over the low interest rates available - your credit scores have to be excellent- you need about six months of mortgage payments in savings and your debt - credit ration should be around 20% for you to feel comfortable to buy - these are general rules of thumb and every buyer's situation is unique- if you would like to talk with my Weichert Gold Service Manager about getting pre approved to purchase and discuss your situation- she would be happy to meet with you in her Parsippany or Kinnelon office- let me know if you would like to do that-
I would be pleased to work with you if you are in a good place to move forward-
Lynda 973-768-1888
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