Bump, I am in the market right now for a house. I am looking to put least down as possible, but I have money to put down if need be. I’m only thinking that because I would like to have some cash to fix some things on the house and buy a few furniture pieces. How does the seller’s concession work and how much can they do it for? I’m looking at something that is priced at $99k right now. I will have $3-5k available for my down payment. From the sounds of it NACA takes a long time to do and right now I am not looking to wait long.
I believe the max in NY is 6% of the sale price. So if the house went for $99k then up to $6k could be done through seller’s concession (final “purchase price” and mortgage amount - $105k). The seller will only recognize the $99k, the remaining $6k would be used for your closing costs.
I called my mortgage guy tonight and he ran everything by me. Looks like I will need $5,600 to close on this house @ 4.25% using just under $6k on the seller’s concession. If I went with a higher rate, I would need $3,600 down @ 4.75% rate. It’s almost a no brainer to just put the $5,600 down unless someone can convince me why I should not…I wasn’t too thrilled at the $856 payment he threw at me, but i guess that’s life. Gonna have to work a few more days a month to make up for it…
That 856 better include escrow.
yeah, it includes everything. PMI, taxes, etc…
why is the down-payment lower if you put more down? are you buying points to lower the rate?
The down payment would be 3600= $2k less and take a higher rate. My normal down payment is $5,600. ie. the bank is helping you out up front while sticking it to you in the back if you cant afford the already lowered down payment at 3.5% down.
Take the lower rate if you plan on staying there for a while, if you just plan on fixing the place up and selling save the $2k during closing.
Over a 30 year loan, you would save $10,600 - $2k (higher down payment) for a total of $8,000 in total interest. Yes the upfront costs are higher but in the long run you will save…if you plan on staying there.
what I’m taking away form this is that you have no idea how the numbers really break down. this is something you should know on a 6 figure purchase.
I know exactly how the numbers break down. What I’m taking away from this is that your confused as to what I am saying. To answer your question though, I came in here for some guidance…
what makes the rate lower then? (and don’t say because you’re putting more down)
So I know people rave about penfed for car loans. Anyone have any experience for a mortgage through them? For reference, just happened to browse this: https://www.penfed.org/productsAndRates/mortgages/mortgageCenter.asp?intcid=ad-penfed-home-main-55ARMconforming_03302011
do you want an ARM (adjustable rate)? Penfed’s rates look decent, but nothing that can’t be replicated locally.
all I can say about closing costs.
FUUUUUUUUUUUUUUUUUUUUUU
I threw down 20% on my new house which just closed. In addition to that, Closing costs were around $12k but $5k in seller concessions helped bring that down. Can’t wait for my current house to close so I can have some money in the bank again!
I’m probably taking $40k out of my 403B to put down on the house… PMI is about $210/mo otherwise… I’d rather take it out of the shitty market and pay myself the interest.
Are there any disadvantages to doing that in a market where I’m losing about $10k/mo? lol…
I ran into that same thing Jack. I did the math and it was $91 a month for me. I can pay it for 5 years, then when my loan hits 20% equity, it comes off. I would have it paid down by next year, but what I am thinking of doing is investing the money into the house, getting it appraised again and it should raise the value up and I can refi.
I would not recommend this. you haven’t lost or made anything until you cash out. if you cash out at the bottom you’re getting the worst possible value.
PMI of $210/month…thats seems super high, is something else driving it up? What bank are you going through?
^
that too. mine is like $100 on a $150k house.