Average Down Payment - %

Just wondering what you put down. I hear most people don't put down 20% any more...especially young professionals that know their income will increase.

My parents think we are nuts to put less than 20% down. I told them we can avoid PMI with the 'new' types of loans they offer, but they can't imagine a bank wanting to work with us if we have less than 20%!

---

Posted by laborday06

Just wondering what you put down. I hear most people don't put down 20% any more...especially young professionals that know their income will increase.

My parents think we are nuts to put less than 20% down. I told them we can avoid PMI with the 'new' types of loans they offer, but they can't imagine a bank wanting to work with us if we have less than 20%!

---

a lot of banks will work work with you. in today market (espcially NY/LI) its hard to come down with 20%. heck, we are having a hard time putting 15% down and this is only a co-op worth very little compared to a house.

Just go with your heart and make sure 'YOU' are happy with your choice.. as much as people want to help us, you have to take the next step.

I will theoretically be putting down 20%.

Here is my plan (you have my permission to copy if you like).


Assuming I am buying a 400k house:

I currently have about 100k of equity in my co-op which is easily 20% of a house down payment.

But in light of this... I will be doing an 80/10/10 loan initially.

This piggyback scenario I only need to come up with 40k down payment plus approximately 12k of closing costs. I have enouch liquid funds available to cover the initial 10% down payment and closing costs.

I will buy the house... and I will get an 80% fixed rate... and the 'piggyback loan' can be whatever (ARM, fixed)... doesn't really matter.

Cause once I close on the co-op after I am in the house... I am taking my co-op proceed to immediately pay off the piggy back loan... putting me at a true 20% down payment.

I may need to temporarily tap into some 401k funds to get the down payment for the house... but if I have to do that... the 401k loan would also be immediately paid off once I close the co-op.


Any questions or comments on my strategy.. feel free to post them. I am always looking for better options (if there are any).

I thought about a bridge loan (pain to get - very high interest).

And I also thought about trying to schedule the co-op sale within days of a house sale. But that is next to impossible to schedule. Plus I would have to put selling contingencies in my house purchase. That will make my offers weak... and the house sellers will not be happy with that.

I also thought about getting a HELOC on my co-op and using those funds to simply put 20% down and not do the piggyback. But if you open a HELOC and close it within 3 years... there is usually a nice fee you have to pay (around $500). Plus my shytty co-op has their own $500 fee they charge anybody that wants to get a HELOC (bastads).

The piggyback with the intent of immediately paying off the 2nd loan is the best option for me.

When DH bought our house in 1998 (pre meeting me) he put down 20%. The house was $150K and he put down 30K. The house is now worth triple what he paid for it.

We will be taking out the equity and putting that down on our new house... I know a luxury situation so our downpayment will be way over 20%.

---

Posted by DjPiLL

I will theoretically be putting down 20%.

Here is my plan (you have my permission to copy if you like).


Assuming I am buying a 400k house:

I currently have about 100k of equity in my co-op which is easily 20% of a house down payment.

But in light of this... I will be doing an 80/10/10 loan initially.

This piggyback scenario I only need to come up with 40k down payment plus approximately 12k of closing costs. I have enouch liquid funds available to cover the initial 10% down payment and closing costs.

I will buy the house... and I will get an 80% fixed rate... and the 'piggyback loan' can be whatever (ARM, fixed)... doesn't really matter.

Cause once I close on the co-op after I am in the house... I am taking my co-op proceed to immediately pay off the piggy back loan... putting me at a true 20% down payment.

I may need to temporarily tap into some 401k funds to get the down payment for the house... but if I have to do that... the 401k loan would also be immediately paid off once I close the co-op.


Any questions or comments on my strategy.. feel free to post them. I am always looking for better options (if there are any).

I thought about a bridge loan (pain to get - very high interest).

And I also thought about trying to schedule the co-op sale within days of a house sale. But that is next to impossible to schedule. Plus I would have to put selling contingencies in my house purchase. That will make my offers weak... and the house sellers will not be happy with that.

I also thought about getting a HELOC on my co-op and using those funds to simply put 20% down and not do the piggyback. But if you open a HELOC and close it within 3 years... there is usually a nice fee you have to pay (around $500). Plus my shytty co-op has their own $500 fee they charge anybody that wants to get a HELOC (bastads).

The piggyback with the intent of immediately paying off the 2nd loan is the best option for me.

---

This is good. I have a suggestion. How about taking one loan, paying the PMI for one or two months, then taking the proceeds from your co-op sale and putting it directly into your mortgage as a principal payment. You will instantly have the equity and then they will drop the PMI. This will enable you to only pay closing costs on one loan not two.

DJPill....I wouldn't touch your 401K funds temporarilly....unless you won't be penalized. I was told that if I took money from my 401K as a loan for a house....I would pay it back through payroll deductions...but I also could not contribute to the 401K for a year even if I paid it back quickly. Totally not worth it.

I would either take the HELOC on your co-op and pay the $500 fee to close early....or as another poster said, take the 90% loan for the house and pay PMI for a few months until you can pay it up with the proceeds from your co-op since it's only short term. Good luck!

---

Posted by Blu-ize

This is good. I have a suggestion. How about taking one loan, paying the PMI for one or two months, then taking the proceeds from your co-op sale and putting it directly into your mortgage as a principal payment. You will instantly have the equity and then they will drop the PMI. This will enable you to only pay closing costs on one loan not two.

---

Are there even closing costs for the piggyback loan? I thought all the closing costs were included on the main loan.

Chase was going to give me an 80/10/10 and my GFE from them looked very good. No BS fees whatsoever. It also didn't mention the second loan though so I'm not sure.

---

Posted by luvsun27

DJPill....I wouldn't touch your 401K funds temporarilly....unless you won't be penalized. I was told that if I took money from my 401K as a loan for a house....I would pay it back through payroll deductions...but I also could not contribute to the 401K for a year even if I paid it back quickly. Totally not worth it.

I would either take the HELOC on your co-op and pay the $500 fee to close early....or as another poster said, take the 90% loan for the house and pay PMI for a few months until you can pay it up with the proceeds from your co-op since it's only short term. Good luck!

---

The only fee I incur on my 401k is a $40 'application fee'. I have to do payroll deductions to pay back... but there is no pre-payment penalty. I can also contribute like I normally do even if I have a loan. Not bad eh?

If I do the HELOC on the co-op.... thats a $500 fee from my co-op... AND a $450 prepayment fee from Chase. $950 total... very not worth it unless its last resort.

It does hurt a bit to borrow out of your 401(k) because even though you're paying yourself back the interest, you're losing interest you would have accrued with the money you took out.

I read about this yesterday, but we'll have to take a bit out of my husband's. It ***** to take out of the 401(k) but if it's for a house, I think it's for a good cause in the long run.

---

Posted by DjPiLL

---

Posted by Blu-ize

This is good. I have a suggestion. How about taking one loan, paying the PMI for one or two months, then taking the proceeds from your co-op sale and putting it directly into your mortgage as a principal payment. You will instantly have the equity and then they will drop the PMI. This will enable you to only pay closing costs on one loan not two.

---

Are there even closing costs for the piggyback loan? I thought all the closing costs were included on the main loan.

Chase was going to give me an 80/10/10 and my GFE from them looked very good. No BS fees whatsoever. It also didn't mention the second loan though so I'm not sure.

---

Yes there will be closing costs on the 2nd loan. I just did Chase also. Just refi'd. It's hard to remember exactly, but I think closing costs were under 2K.

---

Posted by Blu-ize

Yes there will be closing costs on the 2nd loan. I just did Chase also. Just refi'd. It's hard to remember exactly, but I think closing costs were under 2K.

---

You re-fied into a piggyback loan?

Are you sure there are closing costs with the second loan?

Here is a copy of the GFE worksheet I got from them. Its not the actual GFE... but its pretty close.

Notice at the bottom left... it even includes the 'Easy Close 2nd Mortgage Payment'. Thats my piggyback loan. I would think my closing costs for that loan are included in these numbers.

Sorry for the size.




EDIT: Notice I got just about all my '800 BS fees' waived. The only thing they couldn't waive was the application fee... but $250 of it gets refunded to me when I close. Plus no appraisal fee.

DjPill- that looks good but they didn't break out the 2nd loan closing fees. Ask your banker to do a 90% financing GFE to compare.

I just combined the two loans I had into one regular conforming 30 yr.

ETA: If the fees are the same, something is not right.

---

Posted by Blu-ize

Yes there will be closing costs on the 2nd loan. I just did Chase also. Just refi'd. It's hard to remember exactly, but I think closing costs were under 2K.

---

Blu-ize:


I have been meaning to bump this thread once I got the information.

I just called my CU... and they specifically told me that my closing costs will be the same if I do an 20% down payment loan straight up... or if I do an 80/10/10 loan.

My CU told me there are NO ADDITIONAL closing costs for the second mortgage.


I have been trying to get in touch with my rep at Chase about this... but i have a feeling he is going to say the same thing.

Thoughts?