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MoeCugar's avatar

How much is a good down payment for a house?

Asked by MoeCugar (139points) September 24th, 2017

Lets say i’m trying to buy a 300k house. How much is a reasonable downpayment. I don’t want to be suffering making payments. Also what kind of income should I have ?

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14 Answers

RedDeerGuy1's avatar

60k. Or twenty percent. For a down payment.

JLeslie's avatar

Depends on what you can afford. 20% or more and you won’t have to pay any PMI (mortgage insurance) so at least 20% I think is logical. I put down 50% on my last house.

filmfann's avatar

There are programs for first time homeowners, and others for veterans, and such. You can probably buy a house for a very low down, if you make enough so your house payment is under 30% of your income.

MoeCugar's avatar

Thanks everyone for your ideas. I think i will keep saving up until i can buy the house in full . I dont feel like paying interest/mortgage. That way i can start benefiting from the house right away. Ill start by getting a higher paying job.

JLeslie's avatar

Consider a 15 year mortgage, which will save you a lot of interest over time, but lets you leverage the house. 15 year mortgages usually have a slightly lower interest rate, but it’s the shorter time line that saves you the money really.

johnpowell's avatar

My sister just bought a house a few months ago. Somehow a huge plumbing issue was missed during the inspection. BOOM.. 7,500 bucks they had to come up with.

My mom is currently living without a heater. They had to shut off the gas to her house due to a leak. It is on her to fix. Luckily it is only 600 to get fixed. (She can’t pay it so I am. Mother will have heat)

My aunt and uncle had to have their roof redone a few years ago. 30K.

So there is a lot more than mortgage going on. And it sounds like you wanted to rent the house for passive income. My advice is don’t until you have at least 10K stuck away in a rainy day fund so you don’t become a slumlord.

Dutchess_III's avatar

Well, your loan company may have a minimum. The best down payment is to pay the house in full when you buy it if you can You were talking about a rental. I think they have 20K houses around here that need work. If it’s paid off then the rent you get is 100% profit.

CWOTUS's avatar

Kudos to you if you have the income – and discipline, and faith – that you can “save up and buy a house for cash”. (Full disclosure: I did it once, because I was married to a debt hawk – like me, but more so – we almost never took out loans, and always paid them off early when we did. We lived on the cheap for the first ten years or so of our marriage, and then bought a house “for cash” the week after I quit the job that had enabled those kinds of savings. But even then, and even for a house that cost less than a quarter of what you’re proposing, that was a hell of a stretch.) In today’s culture, this is an extreme rarity. Even people who can afford to buy whatever, wherever, whenever still take out mortgages.

If you check out various mortgage or financial calculator apps, you can plug in whatever numbers you want to assume for total cost of the property, term of the loan, interest rate and different down payment scenarios. (And don’t forget taxes! Property taxes on an estate of that valuation are likely to be over 2% of the total estate valuation per year, every year. Insurance is extra, and necessary also.)

Darth_Algar's avatar

$300k might be a rather high for a house you’re planning to rent out (assuming that is indeed your plan, as you indicated in that other thread).

MoeCugar's avatar

The average house here in Ottawa ranges from 200–400k

Dutchess_III's avatar

Yes but surely there are rock bottom cheap houses like in foreclosure.

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