Down-Payment Question

[guykara]

Hi all,

I'm a first time home buyer, so please excuse what might be a stupid question.

I'm looking at purchasing from a new home community. The model I like is listed at $235k. With upgrades, we're expecting that the total will come to roughly $250k. Is the base price negoitable? If it is, can I negotiate that they lower the amount by let's say $5,000 and help me by applying that towards my down payment to the house?

As I'm looking at mortgage options, I believe I'll end up with a program that requires 3-3.5% down payment.

Thank you,

[Jamisonke]

The base price is certainly negotiable. I would recommend you work with a real estate agent, as the builder's agent has the builder's interests in mind. Unfortunately, however, I do not believe you can negotiate a credit toward your down payment. You can get credits toward closing costs, but you will still be expected to contribute your down payment.

In my case, I did not have representation of an agent so I didn't know I could negotiate the base price for our home. The builder offered a $5000 credit toward the design center, which we used for a washer/dryer, refrigerator and blinds. The builder also offered a 3% closing cost credit. When all was said and done, we brought our 10% down payment and didn't have any other closing costs (which was very nice).

Good luck!

[ShanetheMortgageMan]

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@Jamisonke wrote:
The base price is certainly negotiable. I would recommend you work with a real estate agent, as the builder's agent has the builder's interests in mind. Unfortunately, however, I do not believe you can negotiate a credit toward your down payment. You can get credits toward closing costs, but you will still be expected to contribute your down payment.

In my case, I did not have representation of an agent so I didn't know I could negotiate the base price for our home. The builder offered a $5000 credit toward the design center, which we used for a washer/dryer, refrigerator and blinds. The builder also offered a 3% closing cost credit. When all was said and done, we brought our 10% down payment and didn't have any other closing costs (which was very nice).

Good luck!

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Correct, the seller can not give the buyer their down payment (unless it's family, and then additional restrictions apply).

[TimeToRecover]

Hello,

Definitely I agree with the poster about getting a realtor to do the negotiations for you.  I am debating myself right now between resale and new.  if I decide new I will still have my realtor work the deal for me.  So far I have just looked at the new builds by myself.  A few things do seem consistent with the new builds.

1.  To get contribution to closing costs you have to use their lender.  (BUT some will apply the same amount to upgrades)

2.  The builder I am thinking of using is saying that you have your earnst but to start the contract you need 1/2 of the upgrades paid up front.  this is part of the area I don't know if it is normal etc.  I actually am meeting with my realtor this weekend and will be asking him these questions.  

good luck with your search.  

[guykara]

Thanks guys,

As I'm planning my finances, for a mortgage, would you say it's suffice to show a 3.5% down payment + 3 months of mortgage payments in savings as my assets?

[superdad]

You would want at least 6-8 months of reserves in savings. So take your morgage and times it by 8 and that is what you should have in a savings account.   UW will want to know you have enough in savings if something happens and can make payments and not living pay check to pay check.

[StartingOver10]

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@guykara wrote:

Thanks guys,

As I'm planning my finances, for a mortgage, would you say it's suffice to show a 3.5% down payment + 3 months of mortgage payments in savings as my assets?

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Yes. That is enough. It is better for you to plan for more, but it is enough for qualifying.

[guykara]

Thanks for that info. I think I'm going to wait a little bit longer to purchase and save up more money. I'm going to aim for a conventional loan. 5% down payment + 6 months of reserves.

[DallasLoanGuy]

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@guykara wrote:

Hi all,

I'm a first time home buyer, so please excuse what might be a stupid question.

I'm looking at purchasing from a new home community. The model I like is listed at $235k. With upgrades, we're expecting that the total will come to roughly $250k. Is the base price negoitable? If it is, can I negotiate that they lower the amount by let's say $5,000 and help me by applying that towards my down payment to the house?

As I'm looking at mortgage options, I believe I'll end up with a program that requires 3-3.5% down payment.

Thank you,

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builders dont likt to negotiate off of the price.....  think about it..... they discount to YOU and then they have a comparable sale lower than their normal asking price.

they DO like to offer upgrades and such.

it is a seller's market here right now..... your market may be different.... but regardless.... the builder needs that home to sell close to asking.