estimated % of Down Payment

Asked by jalberto, Philadelphia, PA Sun Aug 18, 2013

Hi, in your opinion what percentage is needed for closing cost of a house, meaning minimum down payment and closing cost? for example a 100k home, would it take 10% for closing and down payment or more or less?Thank you!

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Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sun Aug 18, 2013
BEST ANSWER
It's a tough question to answer. Depends on your financial situation and what loan program you're going with If you're doing FHA, you need at least 3.5% down payment, so for a $100,000 house you need a $3,500 down payment. On a conventional loan you need a minimum of 5%, so on that same $100,000 house you need at least $5,000 for down payment.

Closing costs can also vary depending on the loan program you going with. Rule of thumb is an estimate of about 4-5%. But in reality, there are so many factors involved that it is best to allow a Loan Officer to pre-approve you and give you a detailed breakdown of all the costs involved once you've determined the best program to go with.

I'm always available if you'd like to discuss your options. Good luck!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
2 votes
thanks Mr.Meneses for your answer. Does the FHA Loan allow a minimum down payment of 3.5% because they charge a higher interest rate then a conventional? Which would you prefer?
Flag Sun Aug 18, 2013
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Sun Aug 18, 2013
The down payment and closing costs will depend on the property and the loan program you are using. If you are purchasing the home as a primary residence then you can use a FHA loan that will lend 96.5% loan to value so you need a 3.5% down payment which is $3,500 for a $100,000 purchase price. The closing costs as a percentage go up as the home price goes down because some fees are a fixed amount so will be a bigger percentage on a smaller purchase price but you could use 4-5% for a rule of thumb. So if you went with 5% then that would be $5,000.

So on a FHA loan you would need a total of $8,500 roughly for down payment and closing costs.

You can also do a conventional loan and the minimum down is only 3% but you will get better terms by putting down 5%. So at 3% you only need $3,000 and on 5% you would need $5,000.

Please feel free to call me at 610-906-3319 with any questions or to apply for a mortgage.

John R. Thomas
Certified Mortgage Planner - NMLS 38783
Primary Residential Mortgage, Inc.
610-906-3319 PA Office
1 vote
Christopher…, Agent, Collegeville, PA
Sun Aug 18, 2013
If you're interested in learning how to obtain 100% financing with NO PMI, feel free to contact me directly. Best of luck.

Chris Nelson
RE/MAX SERVICES
Philadelphia Magazine Five Star Award Winner 2012
National REO Broker Association (NRBA) Member
REOMAC Member
REOBroker.com Member
794 Penllyn Pike, Ste. 120
Blue Bell, Pa 19422
215.641.2500 Main
215.641.2542 Fax
484.576.7430 Cell*
0 votes
Larry Lichtm…, Agent, Bala Cynwyd, PA
Sun Aug 18, 2013
Definitely will depend on the loan program you are using to secure your mortgage. Required down payments can vary from 3.5% up to 20%. City of Philadelphia and PA transfer taxes total 4%, customarily split equally between buyer and seller, so that adds another 2%. Deed recording, title insurance and finance costs could add another 2-4%.

So bottom line is there is no % set in stone. Every transaction is a little different.
Please feel free to call me to discuss your specific situation and I can give you a more precise answer.
You can reach me directly anytime at 267-254-7994.

Have a great day. Looking forward to speaking with you soon.

All the best,
Larry Lichtman
Realtor, Property Manager
Your Real Estate Resource For Life
CELL/Text: (267) 254-7994

Liberty Real Estate Associates
924 Arch Street
Philadelphia, PA 19107
Office: (215) 625-4725
0 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sun Aug 18, 2013
Yes, it's the option that'll result in more affordable terms, most of all a lower monthly payment and APR.

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
0 votes
jalberto, Home Buyer, Philadelphia, PA
Sun Aug 18, 2013
so by putting down 5% instead of the 3% I can get better terms? what are those better terms?
0 votes
Terrell Bruce, Agent, Marlton, NJ
Sun Aug 18, 2013
Typically for a FHA loan it's 3.5 percent. Your closing costs can vary depending on many factors. Sellers assist, escrow, property taxes, homeowners insurance etc. But I can give you a definite answer if you would like to shoot me an email. Are you pre-approved for a mortgage?
0 votes
Don Sherman, Agent, Philadelphia, PA
Sun Aug 18, 2013
Good afternoon;
The way to cut your out of pocket expenses is to use FHA financing which you will only need 3.5% of the purchase price as a downpayment.As far as settlement costs you can get up to 6% of the purchase price toward your settlement costs from the seller,also,there ate 2 programs where you can get $500 & $2,400 toward your settlement costs.So as you can see you will need very little money.
Please contact me to speak further about the programs available &.how
they work.We can also talk about the entire buying process & you will be able to decide if you are comfortable with
working with me to reach your goal of a
home purchase.
Don Sherman
Century21 Advantage Gold
Cellphone-267-716-8228
Email-realtor94@gmail.com

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0 votes
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