More on topic, I have to wonder if parents giving a hefty amount of help weigh in on the house hunting decisions.
We actually did have nice help from family on our first house. It was enough to allow us to avoid PMI - yay… but of course in the days of a $63K house that was a much lesser amount than today.
Our house is all one floor. We are happy it’s one story and have been told by D’s OT friend that it’s pretty good for aging in place. we think so too. haha!
We did not help son and DIL with downpayment but if we had would have respected their final choices. We did get pictures of houses they were considering and did weigh in a little but mostly with positive vibes-looks nice, great location, etc. Not sure though what I might have said if they had seriously considered a house I truly felt was a bad idea!
We did not get downpayment help from our families with buying our first house in the 80’s, with a 13.5% mortgage rate with PMI involved. We eliminated the PMI fairly early. And the house was only about $75,000.
We did too…back in the 80’s. But I don’t think PMI can be eliminated anymore on the same mortgage. Probably can be if one refinances with sufficient down payment. Not sure.
Hope someone else verifies.
S & DiL have landed a house! #22 , which was almost at the top of their actual budget (not the stretch budget) so they are very excited and will have money left over for, you know, furniture.
It lacked one thing they hoped for, will need work for a few things but nothing major. Their offer was accepted because it wasn’t a “competitive” pool – i.e., sellers kept showing the house until they got an offer they liked and that was it. No open house.
Information only inspection, offer was 8% above the ask, and the seller really wants to close quickly and they can totally do that which was their biggest advantage. Also, their real estate agent leaned hard on the selling agent on their behalf. They are so, so, excited.
Great news! Congratulations to them!
@greenbutton that is terrific news!
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We didn’t help our son financially with buying his house, but he and I had a wonderful time on the phone spending hours on our computers together sharing links to houses in the area where he eventually bought. He trusts our real estate judgement, asked us every question imaginable, and we discussed at length what to look for and what to avoid. Number one was finding a good realtor, which he did. We considered dozens of houses together. Eventually, he and the realtor narrowed the choices to two, either of which were great so, at that point, he just went with his gut. He bought just before Covid started driving up prices, and he was eligible for a VA loan, so he didn’t need any funds from us, but he asked if I could come out to help him de-bachelor the place as he thinks I have “mad skills” in that department. We had to wait until after the vaccines, but DH and I ended up spending three weeks and about $2K painting, sewing drapes/pillows, adding shelving, decorating, and helping him make some furniture choices. The house is beautiful and sold over asking recently. That period was one of the best I’ve ever spent with our son. Now he’s married and moving, and we will have no input at all on the next house. Boo.
We helped D and SIL buy both their first and second (current) houses. They had a list of criteria and a budget (D is a planner). They asked us to go with them to look and make suggestions which we did. But we did not try to sway them at all. It was their purchase and their choice.
Interestingly it was our S who looked at real estate online and found their current house. He knew the area they wanted, specific criteria and price range.
I don’t think the law changed.
By law, it must be removed automatically at 78%, or upon application at 80%:
We put down a huge amount on our house back in the day (60%), so we could have a manageable mortgage on one small govt salary. Because we had such a substantial down payment, we had no mortgage insurance. It was a good strategy for us, as I never worked full time again once we started our family shortly after our mortgage and my salary was used to help fund retirement accounts, tuitions and other important things while H’s mostly was taken up with paying off our mortgage until over time his salary gradually rose.
When your loan balance reaches 78% of the home’s original purchase price, your lender must automatically terminate your PMI
That can be a hefty amount for some home purchasers and could take a lot of time. Remembering that in the first many years of paying a mortgage, one is actually paying way more interest than principal.
This is one reason we helped our kid with the down payment. The kid was very close to the 20% down…so we just added to what he had. Monthly payment is substantially less.
Wayyyy more… Around 4 times as much interest than principal.
I’m a bit skeptical on what the starter home prices would buy in some of those cities.
Maybe 1BR 1 bath anywhere remotely near me in San Diego and well under 1000 sq ft. In some neighborhoods, there are no listings under $600,000 period.
If you read the article, it includes the surrounding towns within commuting distances. Yes, there are such houses in the suburbs here but not in the city, and yes, they get snapped up very quickly.
That said, “commuting distance” in my neck of the woods will mean commute from hell. 1.5 hours each way, easily.
Where do you find a ‘starter home’ near Seattle for $535k? DD has been looking for years (as they keep rising faster than their downpayment savings or income). Most they found start at $650 (by the time bidding wars end) for about 1000-1100SF, usually 2 (maybe 3) BR, 1 bath, no basement, maybe a garage, and needing work, so definitely ‘starter home’ level). That may be do-able for the tech incomes, but not for most ‘middle income’ couples combining their salaries.
