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How is the 20% home downpayment typically paid out?

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  • How is the 20% home downpayment typically paid out?

    First time homebuyer in the next year. I am in the process of saving for the 20% downpayment. My question is what is the typical timeframe for payments and does it differ for new construction vs previously owned? For instance, 1) paying 20% up front vs 2) putting down a deposit and then subsequent installments later on in the intervening months would certainly affect how I approach my savings. I'm assuming the actual scenario is closer to the 2nd option but I wasn't sure of a general timeframe. Do they typically ask for chunks of 5%, 10%, something else? Thanks.

  • #2
    20% due at the time of closing.

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    • #3
      You need to pay the entire agreed upon down payment at closing to close on the loan, regardless of an existing property loan or new construction loan.

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      • #4
        Usually you have to give some sort of earnest money to get the closing process started. Then the rest of the 20% down payment is due upon closing. For example, I had to pay $7500 in earnest money to get the process rolling, then the rest of the 20% down payment was due at closing. And yes if for some reason it didn't close I would have received the $7500 back.

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        • #5
          You might put in 1-5 k at your offer as a sorta down payment. But yes the vast majority is due at closing. Including taxes and fees.
          You might pay s few fees ahead of closing

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          • #6
            I put $1,000.00 in with my purchase offer. Then at closing the remaining of my down payment, plus escrow, taxes, insurance, lawyer fees, realtor fees, etc... So don't forget to factor those in.
            $1 saved = >$1 earned. ✓

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            • #7
              Earnest money deposit with offer

              Closing costs due at closing:
              Pay attention to this. They will include prorated items such as property taxes paid or due and your expenses.These are on top of the purchase price.
              Purchase price
              Loan
              Amount due:

              Two checks:
              Earnest money
              Closing (your 20% plus amount not covered by earnest money). You will need more than your 20%.

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              • #8
                Originally posted by JK View Post
                Do they typically ask for chunks of 5%, 10%, something else?
                It's customary that the down payment is handed over at closing $1 at a time by slowly sliding each dollar across the table. I'd make sure to set aside at least 3 days in order to complete this process.

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                • #9
                  I’m looking at some mortgage paperwork sitting on my desk right now. I see the down payment plus an additional $19,000 staring back at me that I’m not looking forward to...

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                  • #10
                    CordMcNally ,
                    • Do coins need to be wrapped?
                    • Do the bills need to be only singles?
                    • Three days straight or scheduled breaks?
                    • Ten bucks would be my max.

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                    • #11
                      If you really want discouragement my last closing was a $1.4M down payment and over 25K in closing costs, no points! Appraisal alone was over $5K. Ughh!

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                      • #12
                        Oh yeah and prorated taxes. When I bought my last house the former owner just paid the school taxes so I had all that to cover as well.
                        My lawyer made it easy. I cut a big check to him and he cut the smaller checks out for all the little nonsense.

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                        • #13
                          Originally posted by EntrepreneurMD View Post
                          If you really want discouragement my last closing was a $1.4M down payment and over 25K in closing costs, no points! Appraisal alone was over $5K. Ughh!
                          (back of napkin math, 1.4 * 5 = 7... ?!?! (presuming 20% down)) I've got to get friends like this...

                          ___________________

                          My closing agent (or whatever they are called, the place where closing took place) did all the payouts for me. I wired money from my bank to them in the morning, went to closing in the afternoon, my lawyer & realtor met me there, I signed my life away, then they presented their own checks to the sellers, realtor, lawyer, & showed me all the checks going to the town & mortgage & insurance company.
                          $1 saved = >$1 earned. ✓

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                          • #14
                            Originally posted by Cubicle View Post

                            (back of napkin math, 1.4 * 5 = 7... ?!?! (presuming 20% down)) I've got to get friends like this...
                            Sorry to disappoint. This was a mere $3.7M purchase 2 1/2 years ago, I just like to go heavy on the down payment and pay off any debt quickly, should be paid off within next 12 months. Loan balance now a paltry $1.2M. Chump change

                            I'll be your friend!

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                            • #15
                              Originally posted by EntrepreneurMD View Post

                              Sorry to disappoint. This was a mere $3.7M purchase 2 1/2 years ago, I just like to go heavy on the down payment and pay off any debt quickly, should be paid off within next 12 months. Loan balance now a paltry $1.2M. Chump change

                              I'll be your friend!
                              Only $3.7 million? Sorry, not gonna make the cut into Cubicle's "sphere".
                              $1 saved = >$1 earned. ✓

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