

How much deposit do you need for a home loan in America? - Dramatize


======
patio11
Traditionally, banks required so-called "down payments" of 20% of the purchase
price of the house (i.e. they were willing to finance up to 80% of the
purchase price of the house, no more). At the height of the bubble, it was not
uncommon to get mortgages with "no money down", i.e. with no down-payment (and
100% -- or more! -- of the purchase price of the house lent by the bank).

These days norms are in a bit of flux: many banks will accept a nominal down
payment (at, say, 5% of price) and charge an extra fee for private mortgage
insurance (PMI) until your equity in the property exceeds 20% of the purchase
price (that will take a number of years, typically, if you pay mortgages on
the agreed-upon schedules). This insurance protects the bank in the event of
your default.

This is all negotiable (though some banks are more willing to negotiate than
others).

~~~
Dramatize
Thanks for the info. I missed out on the no down-payment loans here in
Australia. 20% seems to be around the same as here now.

The reason I'm looking at American property is you can buy homes in SF for
significantly less than here.

For example $350 for this: [http://www.redfin.com/CA/San-Francisco/450-London-
St-94112/h...](http://www.redfin.com/CA/San-Francisco/450-London-
St-94112/home/1934372)

Compared to $550 for this: [http://www.realestate.com.au/property-house-qld-
albion-10686...](http://www.realestate.com.au/property-house-qld-
albion-106861333)

In Sydney a property like that would be +$700k

~~~
tptacek
That house is tiny, looks to be in poor repair, and is in one of the worst
neighborhoods in San Francisco (Excelsior, adjacent to Bayview, which _is_ the
worst neighborhood in San Francisco; I lived there for a few months).

The median home sale price in Excelsior _is_ $550k; and again, that's in one
of the less desirable neighborhoods in San Francisco.

If you can buy a house anywhere in the world, or even anywhere in the United
States, for god's sake don't buy a crappy house in one of the most inflated
real estate markets in the entire world.

(FWIW, we put --- I believe --- 10% down on our house, 5 years ago).

