Author Topic: Downpayment for a condo: 10% v/s 20%  (Read 537 times)

Nikii

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Downpayment for a condo: 10% v/s 20%
« on: September 25, 2019, 09:16:56 PM »
Hello-
So we are looking to buy a condo and would like to receive feedback on the downpayment we should be putting down.

We have 10% + Closing costs saved in regular Savings account

Additional 10-12% is invested in a taxable brokerage account with Vanguard (index funds).

In this case, is it advisable to withdraw from the brokerage account to put 20% down for the condo or to just put 10% down (and pay the PMI) and leave aside the brokerage account

Please let me know if any additional details are needed. Thank you in advance!

jerseymark

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Re: Downpayment for a condo: 10% v/s 20%
« Reply #1 on: September 26, 2019, 04:36:42 AM »
I would do 20% and either
- withdraw from the brokerage account(remember to factor in any taxes this may incur for the year)
Or
- Continue saving until you can get the 20% without a withdraw

IMO PMI is a big waste of money, it also can be a pain to get out of even if you hit 20% in initial equity(may require reassessment, if market drops could require a lot more equity, etc...)

Kris

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Re: Downpayment for a condo: 10% v/s 20%
« Reply #2 on: September 26, 2019, 06:14:13 AM »
Put 10% down and do an 80-10 loan. Two loans, one for 80%, the other for 10%. That gets you out of PMI.

https://www.nerdwallet.com/blog/mortgages/80-10-10-loan-how-it-saves-you-money/

frugaliknowit

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Re: Downpayment for a condo: 10% v/s 20%
« Reply #3 on: September 26, 2019, 01:52:49 PM »
I would NOT do PMI.  PMI is pure HEIST!

Either Piggy Back (the old term for the 80-10-10) which is a HELOC of 10%+ 10% downpayment + 80% mortgage or 20% down.  They can be a bit challenging to get approved (you've got to be very clean...). 

I have no problem with liquidating some of your brokerage account, either.

Dicey

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Re: Downpayment for a condo: 10% v/s 20%
« Reply #4 on: September 26, 2019, 02:05:36 PM »
PMI is the premium you pay for not having the money to put 20% down. Seems like you have the money, but don't want to spend it. I think you will come to resent the PMI mightily. Just make sure you're not overpaying for more home than you need.

Now if you want to talk about buying a SFH vs. a condo...

Jon Bon

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Re: Downpayment for a condo: 10% v/s 20%
« Reply #5 on: September 26, 2019, 04:31:25 PM »
10-20% down for condos? I thought it was 25% down unless I am going off of old information.

Is this a special program or builder financing or something like that?


Dicey

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Re: Downpayment for a condo: 10% v/s 20%
« Reply #6 on: September 26, 2019, 10:21:41 PM »
10-20% down for condos? I thought it was 25% down unless I am going off of old information.

Is this a special program or builder financing or something like that?
Most likely old information or regional differences. I'm betting the former. I've purchased a condo and a townhouse with 20% down or less.