What percent did you put down when you bought...

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Posted by beautyq115

I know...this is why my FI and I are puzzled about why it matters sooo much. As long as you are pre-approved.

Its such a game

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It matters so much because if you end up having issues with the deal... the more you put down... the more cash the sellers have to hang over your head.

It may not matter to some sellers... but i'd bet it matters to at least half of them.

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Posted by DjPiLL

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Posted by skew

as i mentioned in a previous thread, we took a MAJOR risk and offered a no mortgage contingency. we KNEW for certain that we were approved for the loan and decided to use this to our advantage when presenting our offer. i wouldn't advise this tactic to everyone as it is not only dishonest but could easily backfire if your loan is denied.

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Yeah it can come back to bite you if the loan is denied.

But I don't see this as being 'dishonest' if you offer a no-mortgage contingency.

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how is it not dishonest? i am basically offering you all cash (no mortgage contingency) but in actuality, i don't have the cash.

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Posted by skew

how is it not dishonest? i am basically offering you all cash (no mortgage contingency) yet i don't have the cash.

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Oh.... I thought you mentioned that you offered the no mortgage contingency. Meaning... you are taking out that clause so if you can't get the mortgage... the sellers can keep your deposit.

Yeah thats being VERY dishonest.

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Posted by DjPiLL

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Posted by beautyq115

I know...this is why my FI and I are puzzled about why it matters sooo much. As long as you are pre-approved.

Its such a game

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It matters so much because if you end up having issues with the deal... the more you put down... the more cash the sellers have to hang over your head.

It may not matter to some sellers... but i'd bet it matters to at least half of them.

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Can you please specify what these 'issues' with the deal would be? I mean nobody in their right mind would sign a contract without all of the issues being first being worked out. Once there is a meeting of the minds yes, the buyer does put money in escrow, but there really aren't very many 'issues' at that point. If you can't get the mortgage you get your money in escrow back. If you decide you don't want t the house you forfeit your money, but that is a risk all buyers knowingly take when they go into contract so I don't see any added deterrent.

I think your 'at least half' of sellers care about your down payment statement is very inflated. We had absolutely no issues with a smaller down payment.

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Posted by DjPiLL

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Posted by skew

how is it not dishonest? i am basically offering you all cash (no mortgage contingency) yet i don't have the cash.

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Oh.... I thought you mentioned that you offered the no mortgage contingency. Meaning... you are taking out that clause so if you can't get the mortgage... the sellers can keep your deposit....

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We eliminated our mortgage contingency, and there was no dishonesty, at least not in our case (others may have had different language in their contracts). We didn't say that we had a mortgage commitment; we just said that the deal was not contingent upon our getting one. In other words, we were saying that we're good for the money, and could legally be held liable for breach of contract if we failed to pay up. With the contingency removed, an inability to get a mortgage would not have been a valid 'out' for us to break the contract.

As for why factors other than offer price matter to sellers...you have to consider the number of accepted offers which later wind up falling through. A larger downpayment, pre-approval, and the lack of contingencies are all signs that buyers are a safe bet, that they want the deal to go through, and that there are fewer chances for things to go wrong in terms of getting financing in order. In highly competitive markets, these little 'extras' can become necessary to even have your offer considered. In cooler markets, it's not as big a deal.

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Posted by FTRBRIDE

Can you please specify what these 'issues' with the deal would be? I mean nobody in their right mind would sign a contract without all of the issues being first being worked out. Once there is a meeting of the minds yes, the buyer does put money in escrow, but there really aren't very many 'issues' at that point. If you can't get the mortgage you get your money in escrow back. If you decide you don't want t the house you forfeit your money, but that is a risk all buyers knowingly take when they go into contract so I don't see any added deterrent.

I think your 'at least half' of sellers care about your down payment statement is very inflated. We had absolutely no issues with a smaller down payment.

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You are selling a house for 450k. One buyer comes in at asking price with 3% down with SONYMA financing. Another buyer comes in at asking with 20% down at contract.

Which offer do you go to contract with?

And as much as you think my numbers about sellers are 'inflated'... I think your lack of numbers of deals that have issues are 'under-inflated' or whatever you want to call it.

Deals have issues more than you think.

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Posted by littlewilson

We eliminated our mortgage contingency, and there was no dishonesty, at least not in our case (others may have had different language in their contracts). We didn't say that we had a mortgage commitment; we just said that the deal was not contingent upon our getting one. In other words, we were saying that we're good for the money, and could legally be held liable for breach of contract if we failed to pay up. With the contingency removed, an inability to get a mortgage would not have been a valid 'out' for us to break the contract.

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This is exactly what I was referring to originally. There is nothing dishonest with this.

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Posted by DjPiLL

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Posted by littlewilson

We eliminated our mortgage contingency, and there was no dishonesty, at least not in our case (others may have had different language in their contracts). We didn't say that we had a mortgage commitment; we just said that the deal was not contingent upon our getting one. In other words, we were saying that we're good for the money, and could legally be held liable for breach of contract if we failed to pay up. With the contingency removed, an inability to get a mortgage would not have been a valid 'out' for us to break the contract.

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This is exactly what I was referring to originally. There is nothing dishonest with this.

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i am confused.

by eliminating the mortgage contigency, they are basically stating that the puchase is NOT contingent on a mortgage. therefore, IF they were denied a mortgage aren't they legally bound to purchasing the house? how is this any different than what we did?

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Posted by skew

how is this any different than what we did?

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You told them you are doing a cash deal when you weren't. If i picked someone that told me they were doing a cash deal... and they ended up getting financing... that would annoy me bigtime. A cash deal to me means... a quick and easy closing (three weeks tops). Once I go into contract and find out my closing is going from three weeks to three months... that would annoy some sellers. (Not all sellers I guess... but some).

What the other girl did... she said the is guaranteeing the seller she can get the mortgage... or she will happily forfeit her deposit. She never said she was doing a cash deal.


See the difference?



EDIT: And granted... what you did worked for you... so more power to you. Hell I wish i could pull off something like that. But I would never have the guts to risk it.

3%

5% - we were going to to 10% but changed our minds so we could put the money towards renovations. what a smart idea that was! our house is looking great!!!!!
and, the seller didnt care.

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Posted by charon54

We put down 5% and didn't run across any problems. The seller gets their money no matter how much you put down, so they shouldn't care.

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us too....and we had our pre-approval letter already.

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Posted by myasmom

dony u pay pmi with a 5% down?

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you can opt to get a second mortgage and avoid PMI....I'm not sure what this is called. (piggyback loan)


Good Luck!

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Posted by Niecey

A little over 20% . It actually helped our bid. Since we had to sell quick knowing we could put down that much - they figured we would have no mortgage issues.

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Same with us. The couple wanted to be out so we had a plus added on to us when we were willing to put down so much.

We actually chose to pay the PMI rather than do the 80/17/3 because the 17 is a VARIABLE RATE- meaning, it's like having a credit card for like 40,000 (depending on the price of the house of course - we'll say the house costs around 250,000 and just like a credit card,you can pay interest only and let the amount you owe get even larger. There is a cap of course on the variable rate and if you are disciplined enough to pay more than the interest only, than go for it. But if you are the typical generation debt person who is still trying to get out of credit card debt and pay off school loans, why do this (same with a HELOC but that's another story). I also read a couple of months ago of a bill that they're trying to pass to make PMI tax deductible.......that would be awesome. Personally, we still found it much better to pay the PMI and then refinance.......30 year fixed was what we chose.......rather than have another loan out for more than 40,000 show upon our credit report.....