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Getting ready to apply for first mortgage, any tips welcome.


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So in about 4 months my rented apartment will come to an end, i have been here for 2 years and i don't plan to renew due to their outrageous prices. This month i paid $1665 of rent and the apartment is nothing out of this world, the crime in the area is one of the worse. I'm ready to get the hell out of this hole. I was thinking of perhaps buying my first ever home, or maybe even another apartment. What would be my starting point to get all my ducks lined up in a row? I have never purchased before. I am a member of PenFed as well as NFCU.

Edited by blamed
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Be ready to put 20% down or pay ridiculous finance costs (higher interest and mortgage insurance are the gifts that keep on giving, month after month).

 

Know how much cash you'll need to cover all of the fees and pre-paids, and have it readily available.

 

Have plenty of money left in reserve for when a windstorm blows all of the shingles off your roof, or your A/C dies in the middle of the summer, or a tree root tangles with a sewer line and the tree root wins. Any of those alone will cost thousands of dollars to repair.

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Make sure you have tons of cash on hand.

 

Maybe 10% of the total home cost?

 

What ever happened to the 3%-5% down payment for first time buyers?

 

Be ready to put 20% down or pay ridiculous finance costs (higher interest and mortgage insurance are the gifts that keep on giving, month after month).

 

Know how much cash you'll need to cover all of the fees and pre-paids, and have it readily available.

 

Have plenty of money left in reserve for when a windstorm blows all of the shingles off your roof, or your A/C dies in the middle of the summer, or a tree root tangles with a sewer line and the tree root wins. Any of those alone will cost thousands of dollars to repair.

 

Dang, 20% even for a first time homebuyer? I keep getting told i can take advantage of the 3%-5% down payment since it will be my first time.

 

Pick a good loan officer who explains the details to you.... And takes your calls anytime when you feel anxious.

 

 

That was one of my concerns, i didn't know wether to use a private lender or go through one of my credit unions which i have personal lines of credits with, credit cards and auto loan.

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Make sure you have tons of cash on hand.

 

Maybe 10% of the total home cost?

 

What ever happened to the 3%-5% down payment for first time buyers?

 

Be ready to put 20% down or pay ridiculous finance costs (higher interest and mortgage insurance are the gifts that keep on giving, month after month).

 

Know how much cash you'll need to cover all of the fees and pre-paids, and have it readily available.

 

Have plenty of money left in reserve for when a windstorm blows all of the shingles off your roof, or your A/C dies in the middle of the summer, or a tree root tangles with a sewer line and the tree root wins. Any of those alone will cost thousands of dollars to repair.

 

Dang, 20% even for a first time homebuyer? I keep getting told i can take advantage of the 3%-5% down payment since it will be my first time.

 

Pick a good loan officer who explains the details to you.... And takes your calls anytime when you feel anxious.

 

 

That was one of my concerns, i didn't know wether to use a private lender or go through one of my credit unions which i have personal lines of credits with, credit cards and auto loan.

You can put down very little, it'll just cost you a fortune in extra interest over the life of the loan, plus you get to pay for mortgage insurance every month. You decide who is taking advantage of whom.

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Make sure you have tons of cash on hand.

 

Maybe 10% of the total home cost?

What ever happened to the 3%-5% down payment for first time buyers?

 

Be ready to put 20% down or pay ridiculous finance costs (higher interest and mortgage insurance are the gifts that keep on giving, month after month).

 

Know how much cash you'll need to cover all of the fees and pre-paids, and have it readily available.

 

Have plenty of money left in reserve for when a windstorm blows all of the shingles off your roof, or your A/C dies in the middle of the summer, or a tree root tangles with a sewer line and the tree root wins. Any of those alone will cost thousands of dollars to repair.

Dang, 20% even for a first time homebuyer? I keep getting told i can take advantage of the 3%-5% down payment since it will be my first time.

 

Pick a good loan officer who explains the details to you.... And takes your calls anytime when you feel anxious.

 

That was one of my concerns, i didn't know wether to use a private lender or go through one of my credit unions which i have personal lines of credits with, credit cards and auto loan.

You can put down very little, it'll just cost you a fortune in extra interest over the life of the loan, plus you get to pay for mortgage insurance every month. You decide who is taking advantage of whom.

 

 

 

You do have a point, what about refinacing down the road? Would that make any sense? I'm looking at maybe 200k-225k mortgage.

Edited by blamed
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Make sure you have tons of cash on hand.

 

Maybe 10% of the total home cost?

What ever happened to the 3%-5% down payment for first time buyers?

 

Be ready to put 20% down or pay ridiculous finance costs (higher interest and mortgage insurance are the gifts that keep on giving, month after month).

 

Know how much cash you'll need to cover all of the fees and pre-paids, and have it readily available.

 

Have plenty of money left in reserve for when a windstorm blows all of the shingles off your roof, or your A/C dies in the middle of the summer, or a tree root tangles with a sewer line and the tree root wins. Any of those alone will cost thousands of dollars to repair.

Dang, 20% even for a first time homebuyer? I keep getting told i can take advantage of the 3%-5% down payment since it will be my first time.

 

Pick a good loan officer who explains the details to you.... And takes your calls anytime when you feel anxious.

 

That was one of my concerns, i didn't know wether to use a private lender or go through one of my credit unions which i have personal lines of credits with, credit cards and auto loan.

You can put down very little, it'll just cost you a fortune in extra interest over the life of the loan, plus you get to pay for mortgage insurance every month. You decide who is taking advantage of whom.

 

 

 

You do have a point, what about refinacing down the road? Would that make any sense? I'm looking at maybe 200k-225k mortgage.

 

 

Assuming close to 100% financing and static property values, it will take you almost 9 years of making the normal payment to get down to 80% LTV, which would bring you all kinds of refinance options (assuming your other qualifications like income are okay).

 

Calculate your origination costs and your ongoing finance costs (interest plus mortgage insurance) for the first 9 years, and then add in the cost of a refi (including third-party fees), and that's your total loan cost for that time period by going the low-down route.

 

This is more of a consumption question than an investment question, like deciding how much rent is too much.

Edited by cv91915
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I am going to disagree with some of what you have been told - sure it is ideal to put a large down payment into the mix but for most people it is not realistic -

 

It doesnt matter if you are renting or buying you are paying a mortgage - either yours or someone elses

If you cant come up with a large down payment there are still ways to buy and yes they do cost more because you are seen as a higher risk to the bank - if you have less skin in the game it means the bank takes more risk

So they charge an insurance to cover their investment if you default - that is the price of business if you cant come up with the 20% down

So as an example lets say you buy for 200k

Put the minimum down and use FHA

Thats about a 1400 a month payment with taxes and insurance as well as the private mortgage insurance (PMI)

If the values dont go up you will still be paying down that 200k a little every month - in the above mentioned 9 years if values remain stagnant you still owe less - have had a home

Ben able to adjust your income because owning a home allows you to deduct interest and for most the PMI -until you buy most people do not have enough deductions to get the tax breaks that come with the home - it is a lot better than the small renters credit given to those that rent

So every year you would owe less to the Govt every year - which equates to more money to cover the costs

Now if the values go up you are in even better shape as you are now gaining equity in both the increase in value and the slow monthly deduction that your payment is making.....

Here is another thing to consider - while you have been renting every time your landlord decides he wants more your payment goes up - imagine what rent will be like in 9 years - if you buy your payment DOES NOT go up (taxes and insurance maybe but not your principal and interest)

 

Again if you can get a large down payment it is best there is no arguing that but if you cant it doesnt mean you shouldnt get into a home

There are very solid arguments for why you should even if it means low to no down (VA and USDA still allow 100% financing)

 

Good Luck - just a little more to consider

 

BrianBTheLoanProfessor

Mortgage Forum Lead

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Brian's thoughts might appear to be different from mine, but they are actually quite similar. These decisions should be made based on math and sound financial principles. We do differ in a couple of areas.

 

If you want to factor a tax benefit into the calculations and compare your costs to renting, the property taxes on the home plus the interest will need to be greater than the standard deduction (currently $12,600 for a married couple, $6,300 for a single)... otherwise, unless you have a lot of other tax deductions (which most people do not) you won't get any tax benefit from home ownership. Further, even if it makes sense to itemize, spending a dollar on interest to save 25 cents on taxes doesn't make financial sense in and of itself.

 

I would also disagree with calling 20% a "large down payment," when in fact it's the normal down payment, and everything else is riskier and generally carries dramatically higher financing costs.

 

There are a lot of moving parts to this calculation. A couple more:

  • You should also add into any buy vs. rent calculation 1% of the home's purchase price per year for maintenance and repairs. Some years will be higher, some lower, but you will no longer have a landlord to call when things break, blow off, clog, explode or collapse.
  • You will also need homeowner's insurance, which will be a lot more expensive than renter's insurance.

I wish OP the best of luck with whatever OP decides.

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20% is NOT the standard down these days that is an incorrect statement - 20% is Rare

10% is rare -

most of the larger down payments we see come from people who bought with little to no down - rode through a few years of payments and sold once they had equity - it is EXTREMELY rare to see a first time home buyer with 20% down

 

as far as how much interest you need to deduct - 12k is pretty easy to do if you buy a 150-200K + home

 

So if you have to spend a dollar (rent vs mortgage) and you can deuct 25 cents on one over the other which is better?

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20% is NOT the standard down these days that is an incorrect statement - 20% is Rare

10% is rare -

most of the larger down payments we see come from people who bought with little to no down - rode through a few years of payments and sold once they had equity - it is EXTREMELY rare to see a first time home buyer with 20% down

 

as far as how much interest you need to deduct - 12k is pretty easy to do if you buy a 150-200K + home

 

So if you have to spend a dollar (rent vs mortgage) and you can deuct 25 cents on one over the other which is better?

 

If you borrow $200,000 at 4% you will pay less than $8,000 in mortgage interest even in year one, and it will be less every year. I've pasted an amortization table below showing the cumulative interest over the first 12 payments.

 

In this example, if your property taxes are ~$4,600 or less (which should cover a fair amount of the US on a ~$200,000 house) and those are your only deductions, there is zero tax benefit to home ownership for a married couple compared to taking the standard $12,600 deduction.

 

This isn't my opinion, it's just math. I also stated that the tax savings in and of itself wasn't a reason to pay interest, and I stand by that. The tax consequences are just one of several factors that one should consider in making an informed decision.

 

Screen%20Shot%202016-12-12%20at%202.37.2

 

I never used the word "standard" in regard to the 20% down payment, I used the term "normal," which still isn't the best word, but it really doesn't matter what it's called, it's going to be the least expensive financing option by a considerable sum. Just because you can get approved for something doesn't mean it makes good financial sense.

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20% is NOT the standard down these days that is an incorrect statement - 20% is Rare

10% is rare -

most of the larger down payments we see come from people who bought with little to no down - rode through a few years of payments and sold once they had equity - it is EXTREMELY rare to see a first time home buyer with 20% down

 

as far as how much interest you need to deduct - 12k is pretty easy to do if you buy a 150-200K + home

 

So if you have to spend a dollar (rent vs mortgage) and you can deuct 25 cents on one over the other which is better?

 

If you borrow $200,000 at 4% you will pay less than $8,000 in mortgage interest even in year one, and it will be less every year. I've pasted an amortization table below showing the cumulative interest over the first 12 payments.

 

In this example, if your property taxes are ~$4,600 or less (which should cover a fair amount of the US on a ~$200,000 house) and those are your only deductions, there is zero tax benefit to home ownership for a married couple compared to taking the standard $12,600 deduction.

 

This isn't my opinion, it's just math. I also stated that the tax savings in and of itself wasn't a reason to pay interest, and I stand by that. The tax consequences are just one of several factors that one should consider in making an informed decision.

 

Screen%20Shot%202016-12-12%20at%202.37.2

 

I never used the word "standard" in regard to the 20% down payment, I used the term "normal," which still isn't the best word, but it really doesn't matter what it's called, it's going to be the least expensive financing option by a considerable sum. Just because you can get approved for something doesn't mean it makes good financial sense.

 

This poked my interest.

 

I'm about to buy next year and my purchase price should be about $325,000 and lets assume 4% rate on a fixed 30 year conventional loan with 5% down.

 

What should my interest paid for the year be? My property taxes should be at least $2500.

 

Thanks for digging into the tax deduction side! I was just assuming that I would be able to have a tax benefit for paying interest on a mortgage at all, didn't realize I had to hit a certain threshold as well.

 

I'm married with 3 kids by the way if that makes a difference.

Edited by Carnut
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20% is NOT the standard down these days that is an incorrect statement - 20% is Rare

10% is rare -

most of the larger down payments we see come from people who bought with little to no down - rode through a few years of payments and sold once they had equity - it is EXTREMELY rare to see a first time home buyer with 20% down

 

as far as how much interest you need to deduct - 12k is pretty easy to do if you buy a 150-200K + home

 

So if you have to spend a dollar (rent vs mortgage) and you can deuct 25 cents on one over the other which is better?

 

If you borrow $200,000 at 4% you will pay less than $8,000 in mortgage interest even in year one, and it will be less every year. I've pasted an amortization table below showing the cumulative interest over the first 12 payments.

 

In this example, if your property taxes are ~$4,600 or less (which should cover a fair amount of the US on a ~$200,000 house) and those are your only deductions, there is zero tax benefit to home ownership for a married couple compared to taking the standard $12,600 deduction.

 

This isn't my opinion, it's just math. I also stated that the tax savings in and of itself wasn't a reason to pay interest, and I stand by that. The tax consequences are just one of several factors that one should consider in making an informed decision.

 

Screen%20Shot%202016-12-12%20at%202.37.2

 

I never used the word "standard" in regard to the 20% down payment, I used the term "normal," which still isn't the best word, but it really doesn't matter what it's called, it's going to be the least expensive financing option by a considerable sum. Just because you can get approved for something doesn't mean it makes good financial sense.

 

This poked my interest.

 

I'm about to buy next year and my purchase price should be about $325,000 and lets assume 4% rate on a fixed 30 year conventional loan with 5% down.

 

What should my interest paid for the year be? My property taxes should be at least $2500.

 

Thanks for digging into the tax deduction side! I was just assuming that I would be able to have a tax benefit for paying interest on a mortgage at all, didn't realize I had to hit a certain threshold as well.

 

I'm married with 3 kids by the way if that makes a difference.

 

 

The mortgage interest tax deduction is worth zero to so many people!

 

You would get a small benefit from it, though, compared to renting.

 

95% of $325,000 is $308,750. You'd pay about $12,250 in interest in the first year. Add in $2,500 for property taxes and your itemized deductions related to home ownership would be about $14,750. The standard deduction for a married couple filing jointly is $12,600, so you your itemized deductions would exceed the standard deduction by about $2,100.

 

But note: This doesn't save you $2,100 on your taxes, it saves you the fraction of that amount which equals your effective tax rate. If you are at a 20% effective tax rate, that would save you $420 in the first year (just $35 a month!) -- and your savings will decrease every year because you pay less interest as your loan balance decreases.

 

In your example you are getting $0 back for every dollar you spend in interest until the last $2,100 (about two payments' worth), and only after that, for every dollar you spend you get just 20 cents back, and it's all downhill from there. As its own metric, that's a pretty horrific return on investment.

 

Screen%20Shot%202016-12-13%20at%205.44.3

Edited by cv91915
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BTW, it's too late to edit my post above, but I noticed something funky in the screenshot of my spreadsheet. Even though I zeroed out the "Optional extra payments" field, there is still a total showing after "Total early payments" on the right.

 

I consulted another amortization calculator and confirmed the calculations provided. I'm not sure where that "Total early payments" amount came from, but it's not impacting the calculation that was the basis for my comments.

 

Screen%20Shot%202016-12-13%20at%206.50.2

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Had you said 20% was best to optimize the financial aspect of purchasing I would not have said a word

 

It is not Normal it is not standard it is in fact RARE for a first time home buyer to have 20% down - ask any loan officer the percentage and I would bet money it is less than 5% of all first time buyers come in with more than the minimum down - people have to start somewhere - if you are paying rent and can get a mortgage for a place at around the same costs per month, renting is a waste -

 

Your chart above spins your case however it is

You did not consider the property taxes or the PMI which are also deductible? (for most - pmi is not deductible if you make a high income)

Throw those numbers in and 200k with a low down should put you over the amount needed - if not you would be close enough to throw in some sales tax -child care etc and get past the minimum needed -

 

I totally understand what you are trying to say however you are assuming people can save 20% - even the OP said he would be 50 before he could save that much -

 

It is not realistic to think that a family living pay check to pay check would be able to come up with 40k for that 200k home -

 

Renting is a waste - it is necessary at first but eventually owning a home is the first step in building any wealth - you have to ay for a roof you should be paying for one that can potentially help you achieve a higher standard of living -

 

 

Take Care

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Had you said 20% was best to optimize the financial aspect of purchasing I would not have said a word

 

It is not Normal it is not standard it is in fact RARE for a first time home buyer to have 20% down - ask any loan officer the percentage and I would bet money it is less than 5% of all first time buyers come in with more than the minimum down - people have to start somewhere - if you are paying rent and can get a mortgage for a place at around the same costs per month, renting is a waste -

 

Your chart above spins your case however it is

You did not consider the property taxes or the PMI which are also deductible? (for most - pmi is not deductible if you make a high income)

Throw those numbers in and 200k with a low down should put you over the amount needed - if not you would be close enough to throw in some sales tax -child care etc and get past the minimum needed -

 

I totally understand what you are trying to say however you are assuming people can save 20% - even the OP said he would be 50 before he could save that much -

 

It is not realistic to think that a family living pay check to pay check would be able to come up with 40k for that 200k home -

 

Renting is a waste - it is necessary at first but eventually owning a home is the first step in building any wealth - you have to ay for a roof you should be paying for one that can potentially help you achieve a higher standard of living -

 

 

Take Care

 

Please re-read my posts. I've factored in property taxes into every one of my calculations.

 

I didn't factor PMI into carnut's example because the tax deduction disappears completely at ~$109,000 AGI. He didn't mention income, but given the price point of the home he's considering I'm assuming he is in that ballpark. I would be happy to redo the calculations if PMI is deductible in his scenario. It will change the numbers.

 

I am absolutely not trying to talk anyone out of owning a home or getting a mortgage (we have two of each), I'm encouraging people to do the math so they pinpoint their actual costs, and I'm also encouraging people not to rely on blanket statements about tax savings, because it's $0 for many, many, many, many people.

 

The median home price in the US is in the low $200,000s. A $200,000 mortgage at 4% interest and less than $4,600 in property taxes (plus PMI, if applicable) will produce zero tax benefit to a married couple with no other deductions to itemize, as I have shown.

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Had you said 20% was best to optimize the financial aspect of purchasing I would not have said a word

 

It is not Normal it is not standard it is in fact RARE for a first time home buyer to have 20% down - ask any loan officer the percentage and I would bet money it is less than 5% of all first time buyers come in with more than the minimum down - people have to start somewhere - if you are paying rent and can get a mortgage for a place at around the same costs per month, renting is a waste -

 

Your chart above spins your case however it is

You did not consider the property taxes or the PMI which are also deductible? (for most - pmi is not deductible if you make a high income)

Throw those numbers in and 200k with a low down should put you over the amount needed - if not you would be close enough to throw in some sales tax -child care etc and get past the minimum needed -

 

I totally understand what you are trying to say however you are assuming people can save 20% - even the OP said he would be 50 before he could save that much -

 

It is not realistic to think that a family living pay check to pay check would be able to come up with 40k for that 200k home -

 

Renting is a waste - it is necessary at first but eventually owning a home is the first step in building any wealth - you have to ay for a roof you should be paying for one that can potentially help you achieve a higher standard of living -

 

 

Take Care

 

Please re-read my posts. I've factored in property taxes into every one of my calculations.

 

I didn't factor PMI into carnut's example because the tax deduction disappears completely at ~$109,000 AGI. He didn't mention income, but given the price point of the home he's considering I'm assuming he is in that ballpark. I would be happy to redo the calculations if PMI is deductible in his scenario. It will change the numbers.

 

I am absolutely not trying to talk anyone out of owning a home or getting a mortgage (we have two of each), I'm encouraging people to do the math so they pinpoint their actual costs, and I'm also encouraging people not to rely on blanket statements about tax savings, because it's $0 for many, many, many, many people.

 

The median home price in the US is in the low $200,000s. A $200,000 mortgage at 4% interest and less than $4,600 in property taxes (plus PMI, if applicable) will produce zero tax benefit to a married couple with no other deductions to itemize, as I have shown.

 

You are correct by itself it may not be enough - however any fool can come up with the remaining deductions

How does someone avoid rising rent payments without buying

Or how does a family gain wealth renting -

You make good points but they are very narrow minded - what works for you may not be an option for others

You seem to miss that part

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Had you said 20% was best to optimize the financial aspect of purchasing I would not have said a word

 

It is not Normal it is not standard it is in fact RARE for a first time home buyer to have 20% down - ask any loan officer the percentage and I would bet money it is less than 5% of all first time buyers come in with more than the minimum down - people have to start somewhere - if you are paying rent and can get a mortgage for a place at around the same costs per month, renting is a waste -

 

Your chart above spins your case however it is

You did not consider the property taxes or the PMI which are also deductible? (for most - pmi is not deductible if you make a high income)

Throw those numbers in and 200k with a low down should put you over the amount needed - if not you would be close enough to throw in some sales tax -child care etc and get past the minimum needed -

 

I totally understand what you are trying to say however you are assuming people can save 20% - even the OP said he would be 50 before he could save that much -

 

It is not realistic to think that a family living pay check to pay check would be able to come up with 40k for that 200k home -

 

Renting is a waste - it is necessary at first but eventually owning a home is the first step in building any wealth - you have to ay for a roof you should be paying for one that can potentially help you achieve a higher standard of living -

 

 

Take Care

 

Please re-read my posts. I've factored in property taxes into every one of my calculations.

 

I didn't factor PMI into carnut's example because the tax deduction disappears completely at ~$109,000 AGI. He didn't mention income, but given the price point of the home he's considering I'm assuming he is in that ballpark. I would be happy to redo the calculations if PMI is deductible in his scenario. It will change the numbers.

 

I am absolutely not trying to talk anyone out of owning a home or getting a mortgage (we have two of each), I'm encouraging people to do the math so they pinpoint their actual costs, and I'm also encouraging people not to rely on blanket statements about tax savings, because it's $0 for many, many, many, many people.

 

The median home price in the US is in the low $200,000s. A $200,000 mortgage at 4% interest and less than $4,600 in property taxes (plus PMI, if applicable) will produce zero tax benefit to a married couple with no other deductions to itemize, as I have shown.

 

You are correct by itself it may not be enough - however any fool can come up with the remaining deductions

How does someone avoid rising rent payments without buying

Or how does a family gain wealth renting -

You make good points but they are very narrow minded - what works for you may not be an option for others

You seem to miss that part

 

 

I'm just showing the math and encouraging people to evaluate facts, and not to rely on blanket statements about tax savings that may never materialize.

 

Nearly 70% of US households don't itemize. and that number is even higher on the lower end of the wage spectrum, where you'll find a concentration of people who have little savings.

 

Screen%20Shot%202016-12-13%20at%209.15.3

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Thanks for both perspectives!

 

Thanks cv91915 for the info too!

 

My income is $90k a year. My wife does not bring anything in.

 

Good luck with whatever you decide! If you can estimate the annual cost of your PMI or MIP you can multiple that by your effective tax rate and adjust what I calculated above. I don't think the deductibility for this item starts phasing out until around $100,000 AGI, and then it goes quickly! Also, if there is a portion of the PMI/MIP that is paid upfront, you may even have an additional tax benefit for that. So many moving parts. :)

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I agree on the point that someone HAS to do the math - and no matter what you do dont get talked into it if it doesnt make sense -

 

OP know your numbers the larger the down payment the better off you are however I would agree that a savings is key - do not sacrifice savings to put more down

The first few years will be tough but eventually your income will increase and the housing payment will remain the same - at that point things lighten up

 

When I first started in the business I ran into people with mortgages from the 80's they had payments in the $600-$700 a month range and were loving life as most people were running triple that or more on a new purchase - their income could have supported the higher payment but instead they lived well off the extra - they were also able to add to their savings in a way they never could when they first purchased

 

Good Luck

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I am a NOOB to the site and in the process of purchasing my first home(supposed to close Dec 30) as well as trying to get a grasp on how this whole credit crap works. First on the home purchase. Having read quite a few posts, I want to throw my 2 cents in. First, consider your credit scores. Not the one you get from Credit Karma, Experian, Transunion, but the one you CAN'T GET on your own. What do I mean?? CK has me listed as Eq729,TU 727, EX 709, - was late on a few car payments, no collections. HOWEVER, when I applied for the mortgage, I was told my scores were 599,579, 569!! WTF was my expression when given this information. I was told to pay down credit card balances (about 2k) and that should get me to the 620 mark to qualify for the FHA loan at 3.5% down. Cool beans, I was able to do so while I had the mortgage processor on the phone. 2 weeks later he did a rapid rescore and

bang sure enough, all above 620. Now the FUN part begins! For the next 3 months expect credit pulls, which after 45 days lowers your score. Also keep in mind that even if you don't have the 20% to put down(660 credit score needed to qualify for most lenders, and dare not have any collections) you have to have closing costs, roughly 10% of the cost of the house. Also like previously mentioned, you have to pay PMI for about 5 years before you can even THINK about removing it. Add in insurance and PROPERTY TAXES I am going from paying 1600 a month in rent to 2400 mortgage. I am fortunate that I am now in a position that will allow me to pay the 20% in addition to the mortgage, over the course of the next year, which will qualify me to have the PMI removed, effectively bring my mortgage down, but still more than rent. And as others stated, even with my considerable right offs, I'm not really going to se the tax breaks with home ownership. Weigh all of your options before making the jump, but if you're going to do it, do so SOON before interest rates go up!

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