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Mentor
Mentor
If you are home buying in Texas, Colorado, or Georgia, consider Homeward- they make all cash offers and buy the house for you. Then you rent from them until you can buy it back from them with a mortgage or after selling your current home. I worked with them last year when making offer in Austin, Texas. They are very easy to work with and I had my offer accepted. Whether the fees and risks are worth it is a personal calculation, but it makes your offer competitive in an insane market.
https://www.homeward.com/about-us
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20% always. Avoid PMI
Exactly my PMI is about $80/month. Since I’ve purchased my home the value has gone up $120k. Saying buy a cheaper home if you don’t have 20% doesn’t make sense in some cases especially HCOL areas
Mentor
20%.
30% or more if possible. Every dollar is a force multiplier for the rest of your life
Do the math on how much it cost to finance one dollar for 30 years
In the last 30 years, it had been much more common to see the rates we are seeing today that what we saw last year. Sub 3% never happened and even <5% has been uncommon. The last time we saw really bad inflation issues in the US interest rates went into the teens.
Mentor
If you have good credit and 5%+ down payment PMI is rather irrelevant. Really it is just a math equation. Usually you can find the right answer by looking at each scenario separately. Here are the questions you will want to answer to figure out the right way to go.
1. What is an ideal purchase price?
2. How much do you want the total payment to be?
3. Zip code
4. Credit Score
5. Property type
6. Where is the money for the down payment located (checking/savings, retirement, interest bearing accounts, under the mattress, rich uncle Dave perhaps)?
7. Monthly debts that report on credit (car payment, min credit card payments, student loans etc).
Once you have those answers you can run each scenario and a lot of the time the answer becomes pretty obvious in the numbers.
Coach
If you have plenty of cash to spare then probably 20% to avoid pmi and since interest rates are pretty high / harder to beat in investments.
If you dont have plenty of cash then it all depends on a personal balance of what gets you to a comfortable monthly payment while keeping enough buffer in more liquid investments or cash to feel secure.
A lender I spoke to said 10% (I’m trying to buy a multi family if that makes a difference)
Subject Expert
You should look at it from a monthly payment perspective. If you can afford the monthly payment with 5% down and a PMI, go with that. If not, keep increase down payment until you get to a monthly number you are comfortable with.
3 or 5% is a good idea in a thriving economy. In market conditions like today the bigger the down-payment the better. With smaller down-payment the biggest risk is that you might be underwater if the housing tanks (which it mostly will)
I’ve read the opposite.. if prices are expect to go down the less the down payment the better
Coach
0%
20% is the magic number