We are supposed to be going to contract on our house this week and we were wondering how much is normally put down when you go to contract? Our mortgage guy and attorney both said 10% but FH's dad said that's crazy, only put down a little bit. Is there a hard and fast rule? Or does it depend?
februarybride
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Re: How much $ when you go to contract????
I think you can put down as much or as little as you want. I'm not sure if there is an amount you can't go below -- like not sure you can give just $100. Sometimes the sellers want you to put down a certain amount for their security just in case you break the contract you lose that money. If the ball is in your court...I'd say the less the better. Just cause it goes in escrow and the attorney's benefit on the interest. Good luck! Congratulations on finding a house
Cira
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Re: How much $ when you go to contract????
I think it depends on how much you can afford and how much the Bank wants you to put down. The best way to answer this question is to see what kind of loan you can get with little down. Some banks will not approve less than 10% or will charge you a higher rate - but I'm not to sure on those specifics since we put 10% down and avoided PMI by doing an 80/10/10. Remember PMI!
Good Luck and Congrats on finding a house!
Lisa Rose
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Re: How much $ when you go to contract????
We put down $10,000 on contract, only because we had it. You and your lawyer can/should negotiate a lower amount if you plan on financing more. I do not think $500 will cut it either. The downpayment has to make it look that you are serious about the purchase and an amount of $ that you would not want to lose if the deal fell through
Good Luck!
Fran M
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Re: How much $ when you go to contract????
10% is standard these days but its not the rule. If you want to put down less have your attorney negotiate it into your contract. Thats what you are paying your attorney for.
If the seller is leary about less than 10% you can offer to show proof of assets on the difference or if you dont have the 10% get a preapproval letter from your lender and show them that.
The way I look at the longer I can hold on to my money the better. Even a little interest earned is better than none.
Suzanne
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Re: How much $ when you go to contract????
you can put as little as 3% down but then you pay fees, if you put down 5% then you only have to pay PMI... but sometimes the seller wont sell to someone with that little money down...
starhead
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Re: How much $ when you go to contract????
We're planning on putting down around 15% total, but I know there's a certain percentage that needs to be put down when you go to contract. FH doesn't seem to understand why we need to put down so much when we go to contract if we don't even know if our mortgage application has been approved yet.
How does this all work? We're getting married on Sunday and I really can't take all this stress, even though it's all good things - its too much to deal with.
Marnles
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Re: How much $ when you go to contract????
We put 10% down in total, but at CONTRACT we put 5%, and then gave the other 5% at closing...It wasn't presented to us as an option. So I'm not sure if it was standard to put down 1/2 of what you were putting down in total at closing - ok, I just confused myself!!
Best of luck on the house!! Where are you buying?
jennyg
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Re: How much $ when you go to contract????
At contract you're not dealing with PMI or the bank yet. We put down 5% when we went to contract but most people I know put down 10%. At closing we had a certified check for the remaining 15% paid directly to the seller. As some people have already said, have your lawyer negotiate whatever % you feel comfortable with - although I don't think you can get away with less than 5%. Good luck - it will all work out!
christine1221
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Re: How much $ when you go to contract????
If your mort guy said 10%, then maybe he needs it to show the bank or the seller. You can actually close w/ as little as 3% down, but its not recommended.
I would talk to him & find out how little you can put down on contract ... this money sits in an escrow acct. If you're planning to put more down, then your money is not earning interest for you sitting in this other account. I would want as much as possible in my account until closing. That's what I did when I bought my house a few years ago & now we're looking to buy together. I'm sure we'll do the same.
