How much to put down on a home?

[gamecock43]

Since we are polling....I have a question.

What % did you put down for your down payment on a home? Looking back now, do you have regrets, wish you had done it differently?

[LivingAlmostLarge]

10% on the first condo. No regrets. Finance 80% 1st and 10% second. Perfect deal and worked out beautifully.

Second townhouse put down 20% and financed 80%. No regrets yet, but who knows what the house is really worth. We bought as it was sliding down and so we got it for about 5% less than our neighbors, but it probably went down some, who knows? Until we realize the price on paper and sell we won't know.

[Joan.of.the.Arch]

We put nothing down. For us that was not a mistake because the payments were 20% less than the rent we had been paying. We had an excellent window of opportunity at a time when interest rates were 4% lower than they had been running, prices were not outlandish, and the state was offering a program to secure even lower interest rates for people who would buy in the supposedly distressed zip code where we wanted to live. I just sneered at the lenders pre-qualifying us for five times more than we bought. So even though we put zero down and did not even have anything saved to put down, I think we were very conservative.

However, I will say I think that coming in with the same relative amount of income to this neighborhood nowadays, things are harder to afford. And that is the case over most of the country. Despite the drop in prices recently, houses still take a bigger percentage chunk out of income than they did 15 years ago. That makes it harder to save the 20% down, but also harder to afford monthly payments it even if you've got your 20%.

[simpleyme]

we paid 155K for our house put 20K down paid all closing cost up front as well

no regrets this suckers almost paid for ;-)

[MonkeyMama]

20% down - no regrets.

We put 25% down on our second home (it was about the same price but we had saved up much in the interim).

I have NO regrets.

Granted, where we live the peak was very quick and high, but we had a LOT of people tell us we were idiots to both put so much down on a home. Needless to say most of those people have lost their home(s) to foreclosure, and we are of a rare breed that is young and has a significant amount of equity, in our city. I Stood by the decision then and I stand by it even more now.

If we put 0% down, I think we would be on shaky ground today (nearing upside down territory). But since we put so much down, we have about 40% equity today.

It depends though. We wanted to put a lot down because we knew our income would go down for a time (when we had kids). Our strategy, for this reason, was to put a lot down, and we will hit it hard on the back end. But we don't plan to prepay much in the interim. I think it is a rather reasonable strategy to put less down if you plan to pay extra, and you have the income. BUT I also think there was a solid reason why 20% was the lending standard for so long. There is sound reasoning behind the 20% down payment.

IF we had bought at the peak, I daresay the 20% would not have been enough. Then again, we would have never bought at the peak. Because it was completely unaffordable. But we could have put 20% on our house at the peak and been over $200k upside down today though. Crazy, huh?

But yeah, I think in most cases, 20% would do.

ETA: SORRY but I put the wrong % down - don't know what I was thinking. 25% second time; not 30%.

[disneysteve]

We put down 20%. No regrets. That was standard then (1994) and if it was still standard today, I think we wouldn't have seen a lot of the housing mess that happened.

[JinCO]

We put 0% down on our first mortgage for a condo. We put about 7% down on our second mortgage (using the profit from the sale of our condo). We have about 12% - 14% equity today (15 months after purchase). It wouldn't have made sense financially for us to rent while saving enough to put 20% down because of tax implications. I suppose we could have moved to a lower cost of living area to put 20% down, but we like where we live!

Our goal is to put 20% down for our next home purchase (planning to purchase in 5-7 years). I have no regrets on the first two purchases.

[MonkeyMama]

Originally Posted by disneysteve

We put down 20%. No regrets. That was standard then (1994) and if it was still standard today, I think we wouldn't have seen a lot of the housing mess that happened.

True. If 20% was the standard, people would not have been able to push up housing prices so much. A lot of people where I live were buying homes for 20 times their income, with 0 down. Just insanity, but why the prices rose and fell so quickly. They couldn't pull it off very long.

[jIM_Ohio]

5% down on first condo, and sold it at a nice profit. 8k down payment and walked away with a check for close to 20k when we sold 3-4 years later.

5% down on first SFH (where we live now) and currently in year 3 of 30 year fixed. 80-15-5 plan. We should have second mortgage paid off in about 10 years and 1st paid off in about 18.

Only regret is we could have waited a year or two and bought same house for probably 50k-75k less the second time, or bought it 18 months sooner for 75k less as well (we had the deposit down then pulled out).

[zetta]

30% on my first condo, plus paid an extra point to bring the rate down. Stayed in the house for 4 years. In retrospect I should have only put down 20% and not paid the extra point, and invested the difference.

20% down on our current house. I had enough equity and profit from the condo that we could've put down 39%. Instead I invested that $150k in mutual funds and have seen the money increase substantially in the last 6 years (While the portfolio has taken a beating recently, I intend to ride it out, even if it takes years or a decade.)

[MonkeyMama]

Originally Posted by zetta

30% on my first condo, plus paid an extra point to bring the rate down. Stayed in the house for 4 years. In retrospect I should have only put down 20% and not paid the extra point, and invested the difference.

20% down on our current house. I had enough equity and profit from the condo that we could've put down 39%. Instead I invested that $150k in mutual funds and have seen the money increase substantially in the last 6 years (While the portfolio has taken a beating recently, I intend to ride it out, even if it takes years or a decade.)

& a wise move. Your post brings up a point that there are a lot of nuances involved (no blanket right answer).

We've been in 2 different situations to cash out a large amount of equity. Both times our considered plan of actions were very different, considering all of the facts. (One time, roll the profits to a house, the other time we were going to invest all of the profit. & I could envision a situation where we would do a little of both, of course).

[skydivingchic]

We only put 3% down on our condo and have no regrets.

At the time we were not looking- it just fell in our laps through a coworker of DBF. Because we knew the person, we did the transaction without a real estate agent, thereby saving money for the seller and ourselves (due the owner not having to pay an agent commision). We live in San Diego and when we bought, the housing market was still going up at like 15-20% per year. After one year of ownership we refinanced, got rid of the PMI, and dropped the rate 0.25% to boot.

[meatloafkend]

We put 20% down on our home (that we built 1.5 years ago). I have no regrets. Our first home, we put 5% down, but that was done with one of those 80/20 loans.

[tripods68]

We put down 7% through FHA; when it was only required to put down 3% five years ago. Looking back I do regret it some way. That 4% difference would have made a difference in our cash flow, we needed new bedroom sets, and furniture, and dining sets or simply just kept it for reserve.

[MiikeB]

I put 5% down. I partly regret buying a house so soon sometimes, but I will ride it out until the market recovers. For me the regret isnt really a cash flow issue from the house, its the lack of freedom to move etc.

[MonkeyMama]

gamecock - I revised my first post. I was looking at this thread today and I was like, huh? We didn't put down 30%. It was 25% the second time. Just FYI. We could have done 30% but preferred having liquidity at that point in our lives.

[Fern]

I put down 45% on a house 13 years ago with a purchase price of $209,900, so that's $94,000. I saved my money by paying cheap rent in my sister's basement apartment for several years to do that.

For me, it was DEFINITELY worth it becus i've always had a relatively modest income and so i wanted to be SURE i would never have trouble making my monthly mortgage payments, so they needed to be small.

doing this has allowed me to pursue jobs i truly enjoy over the ensuing years rather than being forced to stick with a job i hate becus i have to pay the bills.

Of course, it also allowed me to avoid paying for private mortgage insurance (PMI).

[Madwand]

I believe everyone should put 5% down or more and this should be required by all banks.

But I also feel that if Uncle Charlie wants to give them the down payment then that should be allowed too.

Zero down loans killed our housing market.

Hey if you got nothing invested in it then it makes it real easy to just walk away.

[bjl584]

20% down. 15 yr fixed mortgage. No regrets.

[Troyrb]

20% on a 20yr fixed and put 20k in improvements such as adding a second bath and new siding during the first year.