Real Estate experts – Question about a down payment on house?

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…If you know anything about buying houses, I need your help!

My fiance and I want/have to buy a house. We basically have no really idea how to go about this. We will of course do more research than on here, but I wanted some basic questions answered on here if it’s possible.

Out price range is $ 100,000-155,000….we are interested in this one house (just from online), I realize we have to go see it and stuff….The house is $ 154,500, and down in the corner of the site, it states:

“Monthly Principal & Interest: $ 704.55
Monthly Taxes: $ 236.33
Total Monthly Payment: $ 940.88

This payment is based on a 30-year loan at a fixed rate of 4.5% with a down payment of $ 15,450. Actual lender interest rates and loan programs may vary.”

I understand you must have a down payment in order to get approved for a mortgage, but is that $ 15,450 down payment essentially set in stone? I know it may vary as it states, but is it possible to get that down payment down to say, $ 10,000? I can afford 10,000, just not 15,000. I know it really depends on certain things, and I don’t expect an exact answer, but I just want to know if it’s common and/or possible to knock off at least $ 5,000 from the initial $ 15,000 down payment? I know you can sometimes get a house for a few thousand less than buying price, but does that help the down payment too? What needs to happen in order to get a house for less than its asking price? Is it only if no one else is willing to pay asking price or up the offer you make on it?

Also, I heard some companies will give a discount to the military? He is currently active duty (Air Force), so what can we do with that?

Any help would be appreciated, thanks for reading.

6 Comments
  1. Reply
    someone
    May 2, 2011 at 9:33 am

    No if you lower the down payment then you add PMI payments to your monthly bill. That property and insurance estimate will most definitely increase. You need to talk with your local bank and work the numbers fitting your circumstances If your credit score is low your interest rate is higher.

  2. Reply
    spalmer
    May 2, 2011 at 10:00 am

    That down payment is not set in stone… it depends on what type of loan you go with and how much you want to put down. A VA loan offers 0 down payment, an FHA loan is minimum 3.5% down, and a conventional mortgage is 10-20% down. However, just understand that the if you put down less than 20%, you will pay pmi (private mortgage insurance). In addition, the less you put down, the higher your payments will be, plus, that payment will also include insurance and pmi and interest rates are more like 5.25 – 5.5% right now — so plan on another $ 200/month, around $ 1200/month (especially with a lower down payment). This site was just giving you an example of the costs with that down payment — that doesn’t mean that it’s the expected down payment. A 20% down payment would actually be 30k on this home. Good luck to you.

  3. Reply
    William C.
    May 2, 2011 at 10:41 am

    i would look into VA financing, you will also need 3100 for closing costs too.

    you can get financing FHA at 3.5% down.

  4. Reply
    ChoDuffield
    May 2, 2011 at 11:24 am

    The site is giving you an example of what your payment would be, but the sale of the property does not have anything to do with the loan you get. So when you ask if they are able to reduce the required down payment the answer is no as they have no control over this. You will need to work that out with your lender or mortgage broker. These days, 20% is the standard minimum down payment although you may be able to work out less.

    It’s a good idea when starting to seriously look to get pre-approved for a loan so that you truely know what you can do. In general, you can ignore the payment info at the bottom since they’re so generic.

  5. Reply
    Lauren F
    May 2, 2011 at 12:14 pm

    Buying a house with someone who is not yet your spouse is a very tricky thing. You probably should first talk with a real estate attorney about the various issues involved when owning property with someone else. Plus, if he is active duty, you really need to think about how long he and you will remain stationed in this area. If you can’t count on staying put for at least five years, it is almost better to remain a renter. That’s because when you find you need to sell the house, it will be at least $ 15,000 in real estate commissions, lawyer and other costs to sell the house.

    But, yes, downpayments are negotiable.

    A very good source for loans for people in the military is the pentagon federal credit union (see http://www.penfed.org). They have fantastic rates.

  6. Reply
    Kristi
    May 2, 2011 at 12:42 pm

    You need a VA loan if he has eligibility.. its 100% with no PMI… does have a funding fee but its worth having no PMI and no down payment…. or FHA= 3.5% down….

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