Neighbors daughter buying a house. She was asking us both, her Dad and I, if it would be better to put 10% down and do something ( IRA, Investment? ) with the other 10% she has. Or to put 20% down on the house, lowering monthly payments?
I wasn't too sure, and since it was a fair chunk of money, was reluctant to give my two cents ( pun intended )
Anyone have any thoughts?
Probably needmoreinfo I guess but that's all I know.
Most people these days would say put the minimum down and invest the rest. You can get mortgages in the 3's and 4's.... and (for example) AT%T is paying over 5.5% right now. But I would stick to blue chip dividend paying stocks, and certainly see if you can get it in a Roth IRA and just reinvest the dividends.
Personal Opinion:
The bigger down payment is better. It'll decrease the monthly payment, and you're likely to get a bigger deal because your lender is taking less of a risk. You'll have more money from month to month because you'll be paying less monthly. I believe you also avoid PMI at 20% unless I'm mistaken. (which I could be, so don't quote me on that)
Yes, avoid PMI. Forgot that part.
More down, lower payments and sock away the difference of what her payment would be if she put 10% down, or pay that much a month toward her mortgage. Situations change and a lower house payment might come in handy one day for her.
20% saves her from getting a pmi which is a mess to get ride of. put the 20% down
Ringo I hope you don't mind but I was just about to make my own thread when I saw your thread as I have a question I'd like to seek advice on.
Mods if I'm hijacking his thread feel free to separate this question.
Most of you know I bought my house last year (April to be exact) well it was an FHA loan, so we have a PMI because I only put 3% down. The PMI insurance upfront was $1606 due at closing, that went into my escrow as I understand it to pay for my PMI from April 2014- April 2015. Now in addition every month I have an additional $102 PMI payment that is part of my mortgage payment escrow, So over the last 12 months that would mean I've paid an additional $1,122 (11 payments there was no mortgage the first month). Now they called me last month and said "great news" you qualify for this FHA Streamline refinance to lower your PMI, I thought ok, what's the catch. Long story short they want to add another $2,000 in principle to my loan but it'll lower my interest rate from 4.75% to 4.25% and my PMI monthly payment from $102 to $61. Part of that $2,000 being added to my principle is another PMI prepayment of $1628 to which my question is if you're making me pre-pay for 2015-2016 what the hell happened to my $1,122 of payments made to cover the current PMI from 2015-2016?
I'm thinking about saying thanks but no thanks I'll keep my higher interest and PMI payment with a lower principle and refinance later on down the road.
advice?
Interest rates are at an all time low...less money down and more in the stock market.
Quote:Interest rates are at an all time low...less money down and more in the stock market.
Talk about a blast from the past! Where have you been!?!
Catch papi for a brick and a half
Thanks for the input, and EricC85... It's cool.
So far the 20% down seems to be the popular answer, but the 10% reasoning makes sense too.
Quote:Thanks for the input, and EricC85... It's cool.
So far the 20% down seems to be the popular answer, but the 10% reasoning makes sense too.
I just know having a PMI sucks, it's literally paying an insurance premium to protect the lender. My post probably explains why I'd say 20% down and avoid the PMI if you can.
My brother is in the market for a house and was wondering how do lenders view two applicants? Let's say person A has around 600 fico score but makes a little less than $200k a year and all open revolving accounts are paid on time. And the co applicant, person B, makes about 70k with a 770 score. Short credit history but with little debt. Do they evaluate each person separately? Take an average of the two?
Quote:Ringo I hope you don't mind but I was just about to make my own thread when I saw your thread as I have a question I'd like to seek advice on.
Mods if I'm hijacking his thread feel free to separate this question.
Most of you know I bought my house last year (April to be exact) well it was an FHA loan, so we have a PMI because I only put 3% down. The PMI insurance upfront was $1606 due at closing, that went into my escrow as I understand it to pay for my PMI from April 2014- April 2015. Now in addition every month I have an additional $102 PMI payment that is part of my mortgage payment escrow, So over the last 12 months that would mean I've paid an additional $1,122 (11 payments there was no mortgage the first month). Now they called me last month and said "great news" you qualify for this FHA Streamline refinance to lower your PMI, I thought ok, what's the catch. Long story short they want to add another $2,000 in principle to my loan but it'll lower my interest rate from 4.75% to 4.25% and my PMI monthly payment from $102 to $61. Part of that $2,000 being added to my principle is another PMI prepayment of $1628 to which my question is if you're making me pre-pay for 2015-2016 what the hell happened to my $1,122 of payments made to cover the current PMI from 2015-2016?
I'm thinking about saying thanks but no thanks I'll keep my higher interest and PMI payment with a lower principle and refinance later on down the road.
advice?
I don't know much about mortgages, but here's an article I found however, that might help you. You may have already read it.
http://www.moneycrashers.com/fha-streaml...uidelines/
I have several houses. Definitely put down the 20% to avoid PMI. In time, if she needs cash, she can obtain a Line of Credit loan on the equity that she built up.
Quote:My brother is in the market for a house and was wondering how do lenders view two applicants? Let's say person A has around 600 fico score but makes a little less than $200k a year and all open revolving accounts are paid on time. And the co applicant, person B, makes about 70k with a 770 score. Short credit history but with little debt. Do they evaluate each person separately? Take an average of the two?
The guy with a 600 fico will have a hard time qualifying for anything without putting at least 20% down.
Reading this thread makes me appreciate still living at home. 26 years old and I don't have to deal with this stuff. Holla!
Quote:I don't know much about mortgages, but here's an article I found however, that might help you. You may have already read it.
http://www.moneycrashers.com/fha-streaml...uidelines/
Thanks yea I read that one, I can't seem to find any answers about this one. I might have to call a lawyer to answer the question. To me it seems like they're just pocketing the $1,122 in premiums paid I wonder if that's the reason they're pushing these "streamline" refinances getting people to double pay on premiums and pocketing the difference?
Quote:The guy with a 600 fico will have a hard time qualifying for anything without putting at least 20% down.
They're looking between 270-300. And putting down 40-60 depending on when they find something. He was wondering if he should use his VA loan or go after fha, usda