Profile picture for user980330

How much do I really need to save for a downpayment?

With my husband fresh out of medical training, we have plenty of monthly income, but no cash on hand for a downpayment.  With 3 kiddo's in a 3 bdr 1 bath 1500 sq ft, 140k house, we really need more space.  We are looking for something in the $350k range.  We estimate that it will take us a full year to save up 5% of that amount for a downpayment, are there options for spending less on a downpayment so we can get the space that we need sooner?
  • March 16 2012 - Saint Louis
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Answers (5)

I presume neither of you are Veterans or you would be considering a Zero Down VA loan.

Your next best alternative is usually FHA. The FHA minimum may be 3.5% but you also need the FHA origination fee and your closing costs so you are right to assume that you need 5% but 6% may be closer to reality. However, there are some ways around that too.

There is a 3rd option for certain areas of any state which is a USDA loan. The USDA has a program that is VA-like in that it also is Zero Down. It is also better than FHA in that there is no Mortgage Insurance to deal with. Some States have a USDA-like program too, e.g. Utah.

You can see a summary of these loan types on our web site [website deleted by Zillow moderator.  Please see our Good Neighbor Policy]
  • March 16 2012
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Profile picture for the_country_hick
Think about a house. It is like a person in a way. It does what it does just fine. Then one day it gets really sick. Once it gets sick the only way to cure it is to spend a lot of money.

Health insurance has a co-pay to reduce your out of pocket costs. House repairs have no deductible or good insurance available for most repairs that can happen. If the furnace dies, the roof leaks, the foundation moves, or the plumbing breaks how will you pay for that when you just spent every penny you had on the down payment?

Wait until you have a bunch of extra money sitting in the bank so you can pay for any potential repairs that may happen. After all of the years spent in medical school 1 more year is not really much time to wait to buy a house.
  • March 16 2012
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Profile picture for wetdawgs
There are costs of home purchase beyond the down payment, so plan on 3.5% for down payment and several percent for other costs.  Home buying is not an emergency, even if you feel squished in your current living situation.   We plan on 1 to 4% of the home market value for maintenance on an annual basis, so don't purchase a home that stretches you too much.



  • March 16 2012
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Profile picture for doralgate
Have your family help you if they can....get an informal gift (loan) from them....put the money in your account for 2-3 months before you apply and nobody should ask you for where it came from when it comes to mortgage financing...
  • March 16 2012
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Profile picture for shapiroamg
FHA min downpayment is 3.5%
  • March 16 2012
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