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No mortgage insurance if you put 20% down. It is a standard for mortgage financing.
Lender rating
Since November 2009
Yeah Katie, alot of homeowners who have the 20% prefer to put that down in order to alleviate the MI. Most of those that do put the 20% down, tend to stay in their homes in excess of 10 years.
Lender rating
Since November 2009
I wouldn't begin to have a clue about the laws in the Northeast, but I started my mortgage career in South Florida and I certainly think that culture plays a big part. Much of my clientele was older and they grew up in a day when 20% down was the standard. I've spoken to my Dad (who's 73) about this subject and he's always amazed when I do a mortgage for less than 20% down.
Lender rating
Since January 2009
Katie,
Sometimes it is less of a "choice" to put 20% down and more of a "requirement" to put 20% down. The areas you mentioned also have a much higher average home price -- thus many of the investors have a higher downpayment requirement due to the loan size (Astoria, ING, etc).
Think about it: if you have a 1,000 sq ft condo in NYC selling for $1 million do you think many of the investors will be cool at a 90% LTV (let alone trying to get mortgage insurance on that)? And that is not even factoring in coops, where 7 figure purchase prices require a MINIMUM in many cases of 25% down.
The Florida thing I agree with UL -- probably more rolling $$$ from a previous sale and also you have many retirees moving to the warmer climate and / or buying 2nd homes (although that may be scaling back as well)
DP
When ever you borrow more than 80%, the lenders with the best rates require Mortgage Insurance. In the areas you are talking about, most mortgage insurance companies don't offer the insurance. So to get the best rates, many choose to put the 20% down.
Lender rating
Since January 2009
My guess is that those numbers are also "fuzzy" and count 80/20 loans done since 2003 as having 20% DP. Cannot say for sure but that would be my guess.
Seriously...there's no way that the median down payment is 20% during the years 2003-2006. Not during the era of Flex 100, my community and FHA. Those numbers just can't be right.
Lender rating
Since November 2009
Back then though, 80/20 was quite common.
I may have misread the statement as you stated the median for FL was 20% for the last 5 years...? I would like to venture the guess that there were so many INV loans in FL to offset lower DP loans for owner-occupants, but from what I have seen in the damage department, the vast majority of loans for purchasing property in FL seemed to have very minimal down payments or else why would the banks be hurting so bad for FL lending..? I am a little more suspect to that median number for FL during the Boom.
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Variations in down payments -- why?
Katie Curnutte, "Katie_C"
Contributions: 26
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I'm the PR manager for data here at Zillow, and I've been examining our second quarter data and looking for interesting trends. One thing I've been looking at is our median down payment information. We have this back to 2003 in the 165 markets we cover, and I've noticed a lot of variations.
In quite a few markets (LA, San Francisco and a bunch of other California markets) median down payments were 20 percent in the first two quarters of 2008. That's no surprise. I know lenders and homebuyers alike are being more cautious lately, so that makes sense to me.
But I've also noticed that there are a handful of markets where the median down payment has been 20 percent every year since 2003. These are mostly in New England, New York City and Florida.
I've had quite a few people ask me why this is, and I'm dying to know. I'm from Boston myself, but I'm flummoxed. Is it a cultural thing? A wealth thing? Are there regulations in these places that I don't know about?
Let me know what you think. I'd love to get some opinions.
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