Questions tagged [down-payment]

to be used for question that related to initial upfront payment made for acquiring an asset [typically used in context of Car or House] while the balance is funded as loan.

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6 votes
2 answers
976 views

Why does a 5% down payment get me a lower mortgage interest rate than 20% down?

I recently received a letter from my (US) bank, saying that I was prequalified for a mortgage. There were two options, both 30 year fixed rate, for the same home price total: 5% down, with a 6.093% ...
1 vote
0 answers
117 views

Will I be reported self employed [closed]

If I was to buy a car and put 9k down and someone else give me a check for $8500 to go with the $9000 will it be reported
20 votes
7 answers
7k views

How is making a down payment different from getting a smaller loan?

What is the difference between these two things? $100k loan with $20k down payment to buy a $100k thing $80k loan with $0 down payment to buy a $100k thing They seem effectively identical. But in ...
1 vote
2 answers
240 views

Can/should you pay the down payment for your house on a line of credit?

I’m a first time home buyer in Canada. I need to pull together ~40K to cover the down payment on a house. I have investments which would cover this cost (mostly in total US market index funds). ...
5 votes
3 answers
3k views

Do you have to take the exact loan amount your are pre approved for?

If you get preapproved for say, a 100k house loan, but then find a house for 110k, are you contractually bound to pay at most a 10k down payment? or are you able to still pay a 20% down payment of 20k ...
20 votes
8 answers
8k views

Should I wait until I have a 20% down payment to buy a home?

With an FHA loan that only requires a 3.5% down payment, I'm able to buy a home right now and comfortably afford the monthly payments. However, I know that means I'll pay PMI and more interest over ...
2 votes
2 answers
340 views

How should I decide how much of a down payment to put on a home?

How should I decide how much of a down payment to put on a home? Should it be a percentage of my assets? Paying 20% down on the largest house I qualified for would require selling 74% of my liquid ...
0 votes
1 answer
127 views

Is a larger down payment worth it? [duplicate]

I currently own a home and am looking to buy another. I will be buying the second home before I sell my current home and the seller of the second home refuses to do contingent offers so I will be ...
4 votes
8 answers
2k views

Do monthly payments decrease on a mortgage later in the loan? [duplicate]

I am planning to purchase a home and all calculations and the banks say principal, interest, property tax, plus mortgage insurance will be close to $1000 per month. The calculator show that if I ...
0 votes
3 answers
491 views

Can a 20% down payment actually hurt you?

Goal: avoid overpaying for a house. Scenario: $200k house 800+ credit score Conventional 30 year loan at market rate Conventional loan requires 5% down minimum I can comfortably afford 20% down Loan ...
1 vote
1 answer
211 views

Changing down payment

I am in the process of buying my second home and taking out a home equity loan to use as my down payment. I will take out 80% to pay off the remainder of my first houses mortgage and keep it as an ...
0 votes
3 answers
185 views

Strategies For Generating 25-Year Revenue Stream (Instead of Mortgage Down payment)

I'm about to buy a house. Interest rates are low and I think it might make sense to invest the money I have, instead of buying cash/making a large down payment. I expect to live in this house for 25 ...
4 votes
1 answer
859 views

When should I use Layaway vs. saving up for an item?

I'm going to buy a watch for $100,000. The seller says that I can deposit $30,000 by wire-transfer, and then pay the whole thing off in 6 months, and after it is fully paid, I will get the watch. I ...
6 votes
3 answers
1k views

How much share should I get in our property

In 2012, my brother, my mom, my dad, and I bought $349,000 property with 10% down to it. I paid the most towards the down payment, $10,000. Our mortgage is around $1,600/month and property tax of $2,...
4 votes
1 answer
613 views

How much equity do I need for a pledged asset mortgage to prevent PMI?

I've been saving up to buy a home, and I've primarily grown this money with stock investments. When I do decide to buy a home, I'm not too fond of the idea of putting all my savings into a mortgage ...
2 votes
2 answers
562 views

Why don't most unfurnished rentals in the US accept the option of paying rent upfront, instead of doing credit checks?

In the US at least, if you want to rent a home found on a typical rental listing site like Trulia/Zillow/Apartments.com/Hotpads, the owner (an individual or a property management company) makes you ...
2 votes
2 answers
152 views

When buying a used car, and getting an auto-loan, need the down-payment be in paper bills?

Consider the following Scenario: you are buying a used car in the United States you get an auto-loan through a used car-dealer. Do large national car dealerships in the United States require the ...
38 votes
4 answers
20k views

What happens if you can't pay at an auction?

Based on this question about wholesaling homes - what happens if somebody purchases a home at auction, places their down-payment, cannot find a buyer, and backs out of the auction? I'm assuming they ...
2 votes
1 answer
2k views

Could we put less down-payment then what is on the offer we signed to the seller?

We originally made an offer with 90k down, but they countered and we accepted and want to do less now, 68k down payment to build a bathroom. We're in escrow right now. Will there be a problem with ...
0 votes
1 answer
86 views

Home Mortgage w/ Very Low Interest Rates: More or Less Down?

I know this question has been asked in different formats previously, but I'm curious about the variables that should go into the decision making process. I have enough in savings, excluding ...
3 votes
1 answer
206 views

Is it possible to make larger mortgage payments to make up for a lack of down payment?

I have a new job, and my wife and I are considering buying a condo near my new work place due to the lack of adequate rental properties in the area. Currently, we have a guaranteed $10,000 that we ...
27 votes
5 answers
12k views

Buy house with down payment, no loan, sell instantly

I just read Rich Dad Poor Dad, and I have no idea about mortgages, loans or real estate. The author of the book describes a scenario in which a property is found for a cheap price (auction in this ...
0 votes
2 answers
1k views

Can you use a small business loan as the down payment on a house?

My wife owns a small business and is looking to purchase a barn or small warehouse to store some of her rental items. We are also looking to purchase a new home for our family. Can she acquire a loan ...
2 votes
1 answer
182 views

If buying a home for less than it's valued will I need a downpayment?

Currently my wife and I are living in a home is owned by her parents. We plan to buy it from them once we get other debts paid off and they're willing to sell it to us for the original price they paid ...
0 votes
1 answer
197 views

What scenarios to look for when bringing a large down payment for buying a house?

I have been looking to buy a house for about $120k. There are abundant properties for sale in this price. While house hunting, I suddenly came into an inheritance, so I can now afford a down payment ...
1 vote
3 answers
419 views

Should one always put 20% down?

I can afford to put up to 25% down in the price range I'm looking at. Assuming average market returns and a high credit score of 800, should I always put 20% down, or should I put less? It would seem ...
51 votes
6 answers
37k views

Why do sellers care about down payments?

I'm going through the process of buying a home now. Whenever I make an offer, the seller wants to know how much of that will be down payment. Why do they care? Isn't the combination of the down ...
3 votes
2 answers
381 views

How to calculate the optimal downpayment + loan term when considering investing cash on hand

We're buying a brand new car at $60K. We technically have the cash on hand, but have opted to get a loan instead and keep the cash in investments. For the purposes of this question & simplicity, ...
8 votes
8 answers
7k views

Credit score and financing new car

Little bit about my situation- Bought a car with cash about 5 years ago, at the time it was a year old. That car is now a total loss and I’m receiving about 5k for it from my insurance. I’m now in ...
6 votes
2 answers
876 views

Do jumbo loan limits apply to the amount borrowed or to the property price? Can I avoid a jumbo with a higher down payment?

I live in an area of the United States where it would be very difficult to get a home for less than the $417,000 conforming loan limit. Unfortunately, jumbo loans seem to have a hard 20% downpayment ...
3 votes
1 answer
292 views

Relationship between down payment and mortgage interest

I just got a new job in a new city in Ohio (United States), and my partner and I want to buy a home roughly a year from now. We have a year to save up, and I am making a financial model to look at the ...
0 votes
3 answers
278 views

Personal Loan for Home Down Payment at Auction?

My recent wife and I have our eye on a nice home that is being auctioned off by an elderly lady who's moving in with her daughter. In our home search, we already have pre-approval for up to 250k FHA ...
3 votes
4 answers
316 views

What are some risk involved in buying an apartment with rent 2 buy?

Disclaimer: I am going to live in my city with a very low chance of moving somewhere else. I am currently looking for viable options for buying an apartment. The traditional way is to save up 15% and ...
4 votes
3 answers
357 views

How to balance saving for retirement with saving for a house?

Situation: Married w/ kids, 29, about to finish grad school, no debt. Accepted a job offer with $87k salary and an employer contribution to an SEP-IRA equal to $13k/year. No additional household ...
3 votes
2 answers
341 views

1/3 owner of home, can I use my part for down payment for mortgage and buy out remaining 2/3?

I inherited 1/3 ownership of my deceased parents' home. I want to buy out my 2 brothers. We are all in complete agreement of this. Can I use my 1/3 portion as a down payment toward a mortgage loan ...
2 votes
2 answers
203 views

Is it possible for me to put 50% down and my partner take out a mortgage?

I'm able to afford 50% of the house in cash, but my partner and I want joint ownership. We have considered taking out joint mortgage, but my partner's median credit score from the 3 bureaus is higher ...
1 vote
2 answers
16k views

Choosing between two car deals on the same car - NPV

This is basic question, but I have starred myself blind on it - I am stuck. I am not sure which formulae I should use. Here is the story. I am looking to buy a car. I have found two dealerships ...
2 votes
2 answers
211 views

How do car dealerships benefit from $0 down bad credit car sales?

This might be a better fit on the economics SE, but having browsed both I feel the body of knowledge here is more applicable. For as long as I've heard car ads on the radio or TV I feel like I've ...
1 vote
3 answers
446 views

No down payment for a house

I'm 19 I don't plan on owning a home until I begin my new career as I'm almost certain they won't have me stay at my home field location. So as of right now I'm trying build up my emergency savings. ...
0 votes
3 answers
838 views

Down payment of 15% vs. 20% - pros and cons

We are buying a home in CA and we would like to know if there is either any financial benefit or disadvantage to a 15% down payment compared to a 20% down payment in our situation. We are pre-...
11 votes
3 answers
4k views

To buy a house, is a 20% down-payment required for a mortgage?

My wife and I want to buy a house. The price is well within our means. The mortgage payment would be less than 25% of our gross income and we have no other debt, so we're comfortable with the payment. ...
0 votes
1 answer
228 views

Receiving $30k from mother for house down payment [duplicate]

My wife and I are planning on buying a house in the near future. My mother has offered to give us $30,000 to put towards our down payment. I am interested to know what method to receive the money ...
6 votes
1 answer
214 views

How to save house down payment as expatriate US Citizen

I am a US expatriate living in Israel and I am trying to save up in the next 7-10 years for a down payment on a house/apartment. The prices here are what some would call a "bubble" here but even if ...
1 vote
2 answers
375 views

Real estate index funds as down payment savings

My wife and I are saving towards a first house down payment (already have $50k expecting to save another $30k with about 2 year target). Rather than leaving them in CD, I was thinking of investing ...
4 votes
2 answers
1k views

Roth 401k Contribution limits reset on job change

I am in my late 20s and am a single filer in US. My current employer and future employer(July '17) both provide Roth 401k plans from the same provider(Fidelity). I am deciding between a)rolling over ...
3 votes
3 answers
5k views

Can my rent to own equity be used as a downpayment?

Here is my scenario. Homeowner wants $296,000 Will give me letter stating that I have 20% down payment as a result of rent payments being applied toward purchase price. My question is...does the ...
2 votes
5 answers
2k views

Buying a house, how much should my down payment be?

Let's say I have 500k in cash and would like to buy a 750k house. My burn rate (monthly spending) is around 4k per month, my income around 8k per month (after taxes, not including IRA contributions). ...
6 votes
1 answer
412 views

Contribute extra to companies 401k with the intention of withdrawing it for house down payment?

My company has a generous 401k program, they contribute 50 cents for every dollar that I contribute, with a very high maximum contribution. Let's say I plan to contribute $10k per year for my ...
3 votes
2 answers
155 views

How should I invest for retirement without a 401k or tax deductible IRA?

I switched jobs at the beginning of the year and my new job doesn't have a 401k plan for the first year of employment. Unfortunately I put a small amount of money this year into a 401k from my ...
1 vote
1 answer
936 views

Why does the present value of a deposit decrease when the APR increases? [closed]

When calculating a down payment in excel, I noticed that by increasing my rate from 3.7% to 6.25%, the money I supposedly have to pay today decreases. Why is that? Thanks a lot :)