I've done a fair bit of research on the topic but I wanted to throw this out there for everyone, this is a good group with your heads on straight and I value everyone's opinion here. Plus with the influx of younger members, hopefully they can benefit from the information as well.

I'm looking to buy a house in the next year or so and I've read and heard a lot of different ideas on how much you should put down on your first house. As first time home buyers, there is no equity being rolled from one house to another so it's coming straight out of pocket. What sort of rule of thumb or guideline do you think is appropriate for a first time home buyer?

For example: the biggest rule of thumb I've heard is to have 20% of the home's value ready for a downpayment. For a 200k house that's 40k. Add in other expenses for the realator, taxes etc and who knows what the number will be. 20% seems high for a lot of young people, so I wanted to hear what other thoughts you might have.

 

20% sounds about right, but like you said, for a young person, that's a lot of greenbacks.

If it's possible, come as close to that as you can, without putting yourself in a hole.

Also, make sure you check the mortgage rates. Make sure they are fixed rates so you don't get hit with a huge increase in your monthly payment. That's part of the problem that caused the housing bubble to burst.

When you check your rates, look over what the payments would be for 15, 20, 30 year mortgages. Figure out what works best for your financial situation.
(if you haven't already of course)

It's tough out there, so be careful, and choose wisely. Make sure your ducks are all in a row, and it's the house you want and can afford before you sign that dotted line.

I've been trying to sell my house for a year, and it's a tough thing to do. Buying is easier than selling, that's for sure.

Good luck with your endeavor, and keep us updated. Pics when you get the new crib too

 

This is a GREAT time to buy. That is all.

 

If you need a mortgage/property survey, let me know the, company I work for can provide that for you. We also do engineering and architecture for DE, PA and MD.

 

the biggest rule of thumb I've heard is to have 20% of the home's value ready for a downpayment. For a 200k house that's 40k. Add in other expenses for the realator, taxes etc and who knows what the number will be. 20% seems high for a lot of young people, so I wanted to hear what other thoughts you might have.

from what i hear every thousand dollars you put down it around 15 bucks a year i think not 100% sure... most people now a days dont put anything down. for example my friends just bought a house for 155k and another friend just bought a house for 179 and he didnt put anything down also.

 

http://www.smartmoney.com/spend/real...1299539050817/

 

Im from NYC and looking to purchase, but I think it the same rules...First-time home buyers could purchase a home with 3.5% Down, with a FHA loan. Down side to that is with anything less than 20% down, you will have to pay private mortgage insurance (PMI), which is a percetage of the loan amount.

 

Yep, the 20% down rule is to eliminate Private Mortgage Insurance (PMI) which is technically lost money. A donation on your part. This website has the best PMI explination:

http://www.bankrate.com/finance/mort...rance-pmi.aspx

Your monthly mortgage payment should not exceed 25% - 28% of your gross monthly income (somewhat conservative) and your TOTAL monthly debt obligation should not exceed 35% of your gross monthly income. This rule of thumb will help you see what price range to shop.

From my experience, you should always have a 'home fund' that you contribute to monthly and considered part of your 'debt' obligation even though you are paying yourself. Too many things can go wrong when owning a home that require big bucks to repair. I've personally had a septic tank shift and go imbalanced which required an expensive dig, and my current front porch is going to have to be replaced soon because a groundhog created an erosion problem and the porch is sinking. All stuff that insurance doesn't cover. Oh yeah, new roofs aren't cheap.

Sounds dreadful, but home ownership outweighs renting. especially if you profit each time you sell a house... Joe is right, now is the time to buy!

Edit: And since you are getting married, be prepared for "We need new furniture/flooring/kitchen/curtains/etc". Another reason for the 'home fund'.

 

PMI blows...... but for 1st time home buyers usually unavoidable. I put about 10% on my first house because thats all I could do...closing costs also were a lot add to the cost.

 

You may want to look at the following web sites to gain some knowledge on the economy and what looks to be on the horizon before buying a home. I wish I knew of these people before I bought.
http://usawatchdog.com/ http://www.infowars.com/ http://peterschiffblog.blogspot.com/ http://www.jimrogers.com/ http://www.nomorefakenews.com/
If you do buy, I would really try to find a foreclosure. REIA has stated that there will be over 1 million (additional) foreclosures on the market this year. Good luck and congrats on the wedding!