How much did you put down on your house?

Question

Im considering about buying a house, but dont know how much to put down...this house only requires 5%

what about you all?

Answer 1

I am in the process of purchasing a home right now and am putting nothing down. Since I am using a VA loan I can get 100% financing without having to get or pay for PMI

Answer 2

If you put down less than 20% (cash and/or a second mortgage), you are subject to private mortgage insurance. This pays off the portion of your mortgage that isn't reimbursed by the proceeds from a foreclosure sale in the event you face foreclosure.

If you put down 20% or more, you do not have to pay PMI. The rate of PMI depends on your credit worthiness and how close you are to the 80% loan-to-value ratio (LTV). PMI is also not tax deductible. So, if you can get a second mortgage that costs up to about 1.5 times the monthly PMI payment, you're doing better than paying the PMI, because the interest on the monthly second mortgage payment is tax deductible.

Keep in mind, though, that the interest rate on a second is usually a point or two higher than the first mortgage. So, you'll have higher monthly second mortgage payments for a given amount borrowed (compared to the first mortgage with less than 20% down).

Personally, and especially in this rock-bottom market, I would go with as little down as I could, while still affording the monthly payments on a larger mortgage (first and second, with no PMI). That frees up your cash for other things (like maybe remodeling or other improvements to the house, increasing its value and livability). Otherwise, if you put a big down payment on your house and you do need emergency cash, you would have to get a second on your house, anyway.

Answer 3

I say it depends on how much cash you have and where you need your payment to be.

The days of the 80/15 mortgages are pretty much gone.  The seconds were the first to go.  Now I'm being warned that many PMI companies won't insure more than a 90% LTV, so if you need to only put down 5%, don't dilly dally.  It might not be your option for much longer.

Keep in mind that interest and for most people PMI and property taxes are deductible from your income.  The higher your tax bracket the more mileage you get from these expenses, so reducing them may not have as much advantage as we sometimes believe.  PMI can also be removed when values increase.  

I think it is smart to keep your cash liquid, and working for you.  There are ways to get some pretty safe good rates of return, but it's not in CD's or money markets.

I think you should do the min. down and BANK the rest.The people who don't get in trouble are the ones who have cash liquidity.  Homes can often put you in a situation where you need that.

Answer 4

in this market- i will put the lower amount of down payment on the house as i can. you can always pay down your principal later if you want, but if you going to save some money- better is to keep them in your bank , then have them tied up in your mortgage.

Answer 5

I put 10% down on my current house.  Got a 2nd for 10% and paid that off within the year.  Still working on the 30 year fixed rate mortgage.

Answer 6

25% on the last one.  The more you put down, the less you borrow, the quicker it is paid off and less interest.  You must put down enough so the monthly payments, including taxes and insurance, is an amount you can comfortably pay.

Answer 7

My answer is very odd.  I bought a 5 acre plot and built my house in the 1970's.  It's a lovely house and we recently upgraded heavily. ($125K plus).  Nonetheless the property is still worth upwards of $350K)