Questions tagged [down-payment]

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

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48
votes
6answers
20k 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 ...
38
votes
4answers
14k 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 ...
28
votes
7answers
17k views

Should I pay more than 20% down on a home?

I'm starting to consider buying a home in a year or three. I'll have a lot of money available at that time -- perhaps enough to do more than the standard 20% down payment. I might be able to manage ...
27
votes
5answers
11k 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 ...
21
votes
9answers
34k views

Is there any reason not to put a 35% down payment on a car?

I went to the car dealership and was planning to finance a car under my brothers name, but since his credit is new AND he just financed a car 2 months ago, the salesman said it probably wouldn't work. ...
20
votes
4answers
3k views

Is it better to use a 401k loan to make a down payment or to put less than 20% down?

I'm about to buy a house and am considering two options: Make a 12% down payment and pay for mortgage insurance Take out a 401k loan and make a 20% down payment I'm having a hard time finding ...
19
votes
8answers
7k 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 ...
18
votes
8answers
7k views

60% Downpayment on house?

My fiancee and I are shopping for a house, and very fortunate to have the assets to allow us to make a healthy downpayment. We both like the idea of a lower monthly mortgage payment, specifically the ...
16
votes
4answers
10k views

Will our hefty student loans affect our chances of getting a mortgage?

My husband and I live simply but we're content. I'm an avid budgeter and love finding ways to be frugal. My dilemma right now is that we've been able to keep our living expenses below what we make, ...
14
votes
5answers
2k views

Should I put more money down on one property and pay it off sooner or hold on to the cash?

I've a huge chunk of money saved up for a down payment on a property that I'd eventually like to pay off and use as a rental. The assumption is that the property value will go up substantially over ...
12
votes
6answers
4k views

How much of a down payment for a car should I save before purchasing it?

I am thinking about getting a new or used car from a local dealer in town. I have worked and saved some money to use as a down payment for it. Some people have told me that I should save nearly all ...
12
votes
2answers
5k views

A good investment vehicle for saving for a mortgage down payment?

I've calculated that I will be able to save approximately enough for a 20-25% down payment on a home (at my back-end-ratio affordability level) in the next 2-3 years. I'm maxing out contributions to ...
11
votes
3answers
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. ...
10
votes
4answers
1k views

I'm 20 and starting to build up for my mortgage downpayment, where should I put my money for optimal growth?

I have no credit, no loans, and am a contractor for $40/hr at a company and I expect to work here for quite a while (job security should be above average). Every week, I allocate $300 to my Mortgage ...
9
votes
3answers
7k views

How to get a down payment for your next home? Use current home as the down payment on the new one?

I bought my first home last year; it's my primary (and only) residence. I intend to pay off the mortgage in 5 or 10 years, then sell the house and buy a bigger one. The new one would cost 2 to 3 times ...
9
votes
4answers
7k views

Temporarily reduce 401k contributions to help save for a downpayment?

Question I am saving up for a downpayment on a house to be used in 1 year's time from now. I have $20K and I want to have $60K, I know I won't have all of it but I want to try. Even if I don't get to ...
9
votes
5answers
1k views

More money towards down payment versus long-term investments

Background: I am married with no kids (but anticipating them at some point) and no debt at all. My spouse and I have an emergency fund, both fully fund our retirement accounts, and are also keenly ...
9
votes
3answers
773 views

Saving for a down payment on a new house, a few years out. Where do we put our money next?

We currently have two rewards checking accounts. We are nearing the maximums permitted on each account, after which we receive .5% and .25% APY. It's within our means to perhaps open another one, ...
8
votes
8answers
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 ...
8
votes
9answers
18k views

New to investing — I have $20,000 cash saved, what should I do with it?

maybe someone can lend some advice. Background: I'm 28, married, and expecting my first child. Our short(ish)-term financial goal is to continue saving for a home. I'm wondering if I should take ...
7
votes
5answers
5k views

Does size of down payment affect chances of home loan approval?

Does the size of my down payment on a house affect the chances I'll be approved for a loan? Can a 50% down payment overcome a relatively low credit score?
7
votes
1answer
337 views

Getting on the property ladder: mortage, downpayment, fees? [UK]

Once I've got my finances straight I'd like to think about getting my own place, but what sort of money am I looking at to have under my belt before I can begin thinking? Is it right that the UK ...
6
votes
4answers
915 views

Where should I place money I'm saving for a home downpayment?

Roth IRAs allow distributions of up to 10k for "first time home buyers," after they've been open for five years. If you knew you were going to use the money for a downpayment in five years or less, it ...
6
votes
3answers
2k views

Buying a home - whether to pay large downpayment or invest funds elsewhere?

I am buying a home in the U.S. and getting a 30yr fixed loan @ 3.25% interest rate. I would like to know if I should put down as much money as possible, or if I would be better off making minimum ...
6
votes
2answers
839 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 ...
6
votes
4answers
3k views

Should I wait to save up 20% downpayment on a 500k condo?

Proper 2BRs start at $500k in our neighborhood. We're looking at buying, but I'm leery of the $100k downpayment. It would reduce our savings to 50k liquid and 75k in retirement. I can easily ...
6
votes
2answers
1k views

Do banks accept a large gift to me as a valid down payment for a house?

When I bought my house at the height of the bubble seven years ago, I remember having a conversation with a loan officer about the source of down payment money. It was stated to me that if I was ...
6
votes
1answer
304 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 ...
6
votes
1answer
178 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 ...
6
votes
3answers
21k views

Can I use funds in my 403(b) retirement plan for a first-time home purchase?

Can I withdraw funds from my 403(b) retirement plan without penalty, for the purposes of purchasing a first-time home? If not, are there other retirement plans from which I could withdraw without ...
5
votes
6answers
65k views

If I put a large down payment (over 50%) towards a car loan, can I reduce my interest rate and is it smart to even put that much down?

I've saved a lot but not enough money for a car... I am looking to buy a nissan versa which is ~13000 out the door. I have ~11000 that I can put towards a down payment so I am just shy of the full ...
5
votes
4answers
814 views

Should I save for a down payment or pay off school in cash?

I am able to save about $1000/month after all bills. I can either save this money for a down payment on a house, or pay for my (rather expensive) grad school program in cash and incur no additional ...
5
votes
1answer
2k views

First Time Home Buyer - How much down payment? Where to go for Mortgage?

I'm currently spending $15,000 a year in rent and gaining nothing in equity! This needs to change :). Looking to buy a place, I'm in the DC area so it'll be in the $500,000 price range. I have just ...
4
votes
8answers
1k 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 ...
4
votes
1answer
680 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 ...
4
votes
3answers
625 views

How should we prioritize retirement savings, paying down debt, and saving for a house?

My wife and I are newlyweds. We currently have 6 months' emergency fund (3 months are currently in a CD, and 3 months in a high-yield savings account.) We are contributing to get the full match in her ...
4
votes
1answer
715 views

Understanding Gift taxes for mortgage downpayment

We have finally decided to purchase our first home and we plan to borrow interest free money from friends and family to pay off 20% downpayment and get cheaper interest/escape PMI. IRS says .. "The ...
4
votes
4answers
323 views

Should I take a personal loan for my postgraduate studies?

About 6 months ago, I embarked on a Master's degree. Prior to this, I did the math on the postgraduate program and set aside about $31,000 on a separate savings account just for the postgraduate ...
4
votes
2answers
2k views

First Time Home Buyers - Down Payment, PMI and Points

My wife and I are looking to buy our first home in the next couple months and wanted to get an idea of what we are looking at. Right now we have about 80k saved up and want to put 10% down on a home ...
4
votes
1answer
152 views

Taking out money on current home for down payment of new home

My real estate broker is advising me to borrow money against my current house for the down payment on a second house . I need to borrow about 50k. My current house has a principal balance of 80k and ...
4
votes
3answers
260 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
2answers
861 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
1answer
10k views

What happens if the appraisal is different than the sale price?

As I understand: The purpose of a down payment is to minimize risk to the lender. For a traditional mortgage, lenders are willing to lend up to 80% of the value of the house. The appraisal ...
3
votes
2answers
203 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 ...
3
votes
2answers
1k views

Possess full down payment at loan application or settlement?

So, we just sent in an offer on a house stating how much we will pay in cash (down payment). I understand that this is transfered to the seller (along with the loan amount) at settlement. However, ...
3
votes
3answers
4k 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 ...
3
votes
2answers
135 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 ...
3
votes
2answers
2k views

Mortgage points vs. down payment: How should I look at the break even point?

Some relevant questions are here: What are points on a mortgage? Should I pay points on my mortgage? First Time Home Buyers - Down Payment, PMI and Points I am aware that most people look at the ...
3
votes
1answer
114 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 ...
3
votes
2answers
328 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, ...