Skip to main content

First time home buyers, newly debt-free. 10% down in a year or 20% down in two years?

Hey all, looking to get some thoughts on our first home/mortgage.

My wife and I are newly debt free (paid off both cars & student loans this summer). We have a take-home income of about $7,700 per month. We both have excellent credit (800+). We have no kids so with our debt paid off, our expenses are minimal (about $3,000 per month for everything including rent, utilities, groceries, cell phones, personal spending, retirement contributions, etc.).

We are looking to buy a home in the $250-300k range in the next 12 months. We are currently saving money for a down payment and should be able to put 10% down plus closing costs (~$38k) next summer. We will have $30k leftover in a HYSA and checking.

My question is about the timing, and the mortgage approach. If we buy sooner with 10%, would an 80-10-10 mortgage make sense for us, vs. a 90-10 conventional loan? The reason I am thinking about the 80-10-10 is that we would likely be able to pay off the second mortgage in about a year, leaving us with only the main mortgage payment. This seems more appealing than taking PMI on a 90-10 conventional loan. Is there anything else I have failed to consider here?

Alternatively is it dumb to not just wait the extra 6 months to be able to put the full 20% down? We will hit the 10% down savings threshold in the summer and the 20% down savings threshold in the winter so that is the main consideration for 10% down (seasonal buying/availability of houses; not being stuck in the small rental we are currently living in until the following summer if we wait for the 20% threshold).

Any input would be much appreciated!

submitted by /u/glia_enthusiast
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/ikc18n/first_time_home_buyers_newly_debtfree_10_down_in/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear
1 comment
Read more

Fast Rising HOA Fees on NYC Condo, No Budget Provided

My wife and I are first time homeowners and could use some advice on a situation we've been having with our management company and Board. We bought a condo in Brooklyn two years ago, and since then our HOA fees have climbed dramatically. In August of last year, our fees were increased by ~30% and just yesterday we received notice that this new figure would be increased by 16% as of June 1st. The by-laws for our building state that ten days before such a change goes into effect, the Board must provide unit owners with the itemized budget upon which the new numbers were based. This didn't happen last year, and when I asked the management company about it, they just kept vaguely insisting the Board had done due diligence. After I kept pressing, they finally sent a budget that was several years old, so obviously not the one that the new numbers were based on. When I asked the management company for contact information for the Board to get further clarification, I was told that th
Post a Comment
Read more

How to create fidelity investments current bank statement for lender during escrow

I transferred a certain amount to my bank account to complete the minimum down payment required. The bank wants a current statement of the transaction. Unfortunately, fidelity only does quarterly statements so a December statement is not available and we are due to close next week. I called fidelity and they they can only provide a letter but the bank said that won’t suffice. Any way I can find or make one of my own that has my account number/name along with all the recent month’s activities? submitted by /u/bodaciousbeans [link] [comments] source https://www.reddit.com/r/RealEstate/comments/zmnnqo/how_to_create_fidelity_investments_current_bank/
Post a Comment
Read more