10% down

why not wait and have the 10% of todays apt become 20% of the smae size apt in a few years?

Are you looking for conforming or jumbo?

For jumbo, the answer is - not even remotely close. Maybe 20% down, and even that's very tough. At least 25-30% is the norm.

For conforming, I've heard 10% down still exists, but I don't really know that market.

i recd a commitment for 10% down frm chase and wells fargo - conforming. things going in my favor could be a pristine credit, stable job - full doc income, no other debts. on the other hand, many lenders didnt even entertain me because my bldg is a new development and is < 50% under contract.

Yes, I'm just going for conforming. So coverdrive, what kind of interest rate were you offered?

wow! < 50% under contract? that goes to show that shorting jpm and wells maybe has a future.

coverdrive - As far as I know, Chase can not lend in buildings with less than 50% in contract. There is probably a condition on that commitment that you will not be able to satisfy and thats the 50% in contract. I believe they require like 70% or so. You should confirm with them.

90% is available up to $729,50 until 12/10 for us. And up to 417k is still readily available.

On jumbos you will need 20% down up to 1.5M and 25% up to 3M. Most lenders will not lend this much at these loan amounts.

sunny_hong@countrywide.com

Sunny, I have a question:

If a buyer puts down 20% on a $500K property borrowing at 6%, her monthly payment would be - $2400. If rates go up (let's say to 9%) and the price of that same property drops 20% to $400K, and she puts down that same $100K - her monthly mortgage cost would be the same... Am I right?

elena
(broker)

elena - well if youre comparing 500k with 20% at 6% to 400k with 100k down at 9%. Then yes, the payments will be about the same. (about $15 difference).

Thanks Sunny,

Based on that, I would say if a buyer has tons of cash, it is good strategy (as manhattanfox said), to wait a few years. But if someone is a standard 10-20% down buyer, who plans to stay in their apartment for a long time, it may be a good idea to take advantage of current low interest rates (which are not here forever), assuming buyer uses soft market and negotiates asking price down.

elena
(broker)

Elena, I would argue the opposite. If I were in it for the long term I would rather have a low purchase price with a high interest rate. The mortgage can be refinanced later when rates are low, but the principal will never be reduced (unless you threaten to walk away, and in a better market a bank would certainly let you).

bardamu,
I wish I know how many years it will take before one will be able to "refinance later when rates are low". At this point I am more afraid of inflation. But so far everything is getting cheaper: stocks, gold, oil - everything but cash.

elena
(broker)