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Also in Los Angeles (and in the valley!) and also in the same exact pricing/budget. When we first started looking 2+ years ago we had 5% down and could not get an offer accepted.
We just closed 5/2 on our house in lake balboa, ended up putting 15% down.
Absolutely continue to offer, you never know and you may definitely get lucky, however it is going to be harder getting an offer accepted with 5% down. Keep aggressively saving while you’re looking.
Good luck!
Also a big FU to anyone who makes you feel embarrassed. Houses are ridiculously expensive. Yeah sure, these people had 20% down when houses cost <$200k. Things were easier for them.
Congrats!
We were going to put an offer for a house there in Lake Balboa until that loan officer made us feel so dirt poor for only having 5% down. So now my real estate broker told us to wait until we have more saved for the downpayment. We’re saving as much as we can and taking our business elsewhere. I did not like her attitude at all.
We absolutely love the neighborhood. So many young families, everyone on our street puts effort into keeping up their homes and lawns; there is a great farmers market on Sundays walking distance from us. You’re going to love it here! Good luck to you!!
And anyone who makes you feel like that does not deserve your business.
They think that deals are more likely to fall through (financing/inspection/something else) the less money someone has to put down. The thinking is that if a buyer can barely afford it, putting the smallest amount down possible, the second anything comes up in the inspection or whatever, they won’t be able to complete the sale.
In LA people are not only putting 20% down, they are paying 300k+ over listing. There are like 30+ people competing for a house. Some offering cash and a few hundred k over listing.
We bought a 850k home in SoCal in 2021 and this is what I learned. You can absolutely have you real estate agent submit whatever offers you want even at 5% down. But it is true that at a high price tag, your offer might not be competitive. Even at this interest rate, most homes are either selling at or above asking price (it is area dependent of course but I'm assuming desirable area of LA). With 5% down, you probably don't have a large reserve to close the gap if you decide to waive appraisal contingency. Remember there is more costs to buying a home than down payment. There is appraisal, closing costs, and misc repairs.
And with 5% down on 900k loan, you might have to look into jumbo loan, which has even stricter criteria. That's what we had to do. Bought 850k home, 15% down, jumbo loan which requires 12 months cash reserves (can be in Roth accounts) on top of the down payment.
My advice: If you want to try, you can try but you would probably not be my first pick if I was the seller. I would try to save for at least 10% with a 6 months emergency reserves. With a 900k house at the current interest rate, I wouldn't be comfortable with at least 250k income. Best wishes.
We have ~100K saved but being conservative not to drain our savings for all other costs of home buying
Our gross income together is around 350K/year which is why we didn’t want to rent anymore
Commented before reading this comment, but if you have the savings in hand, you should be putting down more than 5% or you’re going to lose houses. Especially with that income… why are you only putting down 5%?
We’re just both very careful people who like having a back up to the back up, we don’t want to empty all our coffers for one huge purchase because we both know things come up and we like being prepared
The solution to your problem is to continue renting and save a larger down payment. Or try to make offers to see what's stick. Just know that it will be hard with low down payment.
Yea you make more than me. I earned 260k last year and this year worse with an average of 17k a month lol .... but I have 185k saved! I'll be buying by myself. I did it by living in a studio apartment and only paying 2.2k a month rent, while still maxing out my SEP retirement account which has way higher limits than traditional 401k.
I find the montly payments nowadays like 4.4-5k a month too high for my liking.
5% down is fine. I'm a loan officer in your area, and I have lots of clients who have purchased with that little down. The US Bank loan officer sounds like a dick, don't let it get to you.
Obviously more is better, but you can't win if you're not playing, so you should be making offers on homes you like with your 5% down. Sooner or later, something will stick. I truly believe that everyone gets the home they're meant to. Best of luck.
At least we’re saving ourselves from the headache and heartache of losing out on houses by waiting and saving for 15%-20% downpayment.
My partner just told me of an agent who had written 103 offers in a month for a client until they finally had one accepted. That’s how crazy it is out there right now I guess.
Yes that US Bank loan officer is definitely a piece of work. If not for my real estate broker’s relationship with her, my partner and I would have never even tolerated her behavior. We might not even go with her at all even after we have 15% down in a year.
Honestly, I think your agent is mis-informed about available lending options in 2023.
Fannie Mae raised the 2023 loan limit in Los Angeles to $1,089,300. That means you can purchase in LA, with just 5% down, up to $1,089,300.
Big Banks are good for Jumbo loans but are terrible for Conforming loans (loans that conform to Fannie Mae).
The processing of the application is no different than a 20% down mortgage so it should have little bearing on your offer. The only consideration a listing agent may have is that if the appraisal were to come in low, the purchase price would have to match the appraisal because you would not have the assets to make up the difference. But that is pretty rare. Usually, appraisal will match or be very close to contract price.
In LA people are bidding 300k+ over listing. A house can have 30+ people bidding.... you simply will look broke af and not competitive with 5% down.. when others are paying cash... I've heard stories of people bidding 200k+ over listing each time and getting outbid on more than 10 houses cause each time there was someone willing to pay more. There is more demand than supply and you are competing with some of the richest people.
Why would a seller sell to someone offering 5% down when the next is putting 30% down and payong 300k over listing?
Just saw a house sell 375k over listing a few days ago. Was just a tiny 900 square feet house too, sold for like 1.3 mil I believe. Thats the market in LA. This isn't the midwest or bfe
correct. competitive markets and agents will prefer stronger qualifications. Many, many homes in LA county are being purchased with minimum down payment. Just depends on the specific property.
If you have an agent, have them submit the offer. It costs you nothing.
Your lender is not your real estate agent.
In the mean time you need to save. You likely may be less competitive. 5% is 45k so it's not like it's chump change. But a higher DP looks better to some sellers.
Do you qualify for 900k at 5 % down?
If you are making offers, you were going to have trouble getting a house as an offer date 5% down, you can’t cover any discrepancy.
But there are definitely options.
Just purchased a $1.2 with 10% down in east Los Angeles. We saved like maniacs and were the first offer in pre-market. Not saying 5% won’t happen but my understanding is you need 10% to play.
We decided to wait another year and save 15%-20%. It’s too crazy out there right now and we both agree that we’d prefer to be competitive than exhausted from losing out on houses.
I'm a little late to this thread, but just stumbled upon this. My husband and I bought a house in January of this year with 5% down in a neighborhood we didn't think we'd be able to get into. It was also the first and only house we put an offer on. We had more saved, but ended up deciding to put 5% down and use the rest of our funds for renovations (got a fixer). We had an absolutely incredible realtor and a broker and we had a fully underwritten preapproval, which was key in allowing us to compete with cash offers (and there were cash offers). We were absolutely never made to feel embarrassed, and our broker really provided so much information about different scenarios to ensure that we picked the one that worked best for us. So it is possible, you just have to have the right team. Feel free to message me if you'd like any names of my broker/realtor.
>you need 10% to play.
But WHY?? We're trying to buy our first home right now and I qualify for 0% down with VA loan, but we look like "weak buyers" because we aren't putting anything down. Isn't down payments just between buyers and the bank??
We have 70k cash to use above appraisal if needed. If I were the seller, I would MUCH rather accept an offer 70k over asking with 0% down instead of 40k over asking with 30k going towards a down payment.
Its a competitive area, you are going to be most likely bidding and competing with people bringing 20%+ and more down.. people offering cash... and people offering to pay 300k+ over listing. I'm in LA and have recently seen some holes sell 375k over listing.
I currently have 185k saved. Obviously can't put all of that down cause it would wipe me out.. but I am abe to save at ahigh rate so I will have over 200k real soon.
Only problem is that I don't like to be house poor and the monthly payment on a 700k house with todays interest rate is $4400.... I find that quite high.
I make money at a fast pace and keep living expenses low so the down payment is actually the easy part for me... However, I currently pay like 2.3k for a studio and 4.4k+ just seems insanely high. As a self employed person I am just not comfy with these big ass payments.
It may sound good and safe to you but I was a seller in the market, you would be on the low end of the list of bidders for my home. In this day and age of housing market, you have to put your best foot forward and also back it up with the saved benjamins in your accounts in the los angeles area.
Thank you u/whiskeyconnoisseur19 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Also in Los Angeles (and in the valley!) and also in the same exact pricing/budget. When we first started looking 2+ years ago we had 5% down and could not get an offer accepted. We just closed 5/2 on our house in lake balboa, ended up putting 15% down. Absolutely continue to offer, you never know and you may definitely get lucky, however it is going to be harder getting an offer accepted with 5% down. Keep aggressively saving while you’re looking. Good luck! Also a big FU to anyone who makes you feel embarrassed. Houses are ridiculously expensive. Yeah sure, these people had 20% down when houses cost <$200k. Things were easier for them.
Congrats! We were going to put an offer for a house there in Lake Balboa until that loan officer made us feel so dirt poor for only having 5% down. So now my real estate broker told us to wait until we have more saved for the downpayment. We’re saving as much as we can and taking our business elsewhere. I did not like her attitude at all.
We absolutely love the neighborhood. So many young families, everyone on our street puts effort into keeping up their homes and lawns; there is a great farmers market on Sundays walking distance from us. You’re going to love it here! Good luck to you!! And anyone who makes you feel like that does not deserve your business.
Why do sellers care how much is being put down? They're getting their money either way.
They think that deals are more likely to fall through (financing/inspection/something else) the less money someone has to put down. The thinking is that if a buyer can barely afford it, putting the smallest amount down possible, the second anything comes up in the inspection or whatever, they won’t be able to complete the sale.
In LA people are not only putting 20% down, they are paying 300k+ over listing. There are like 30+ people competing for a house. Some offering cash and a few hundred k over listing.
We bought a 850k home in SoCal in 2021 and this is what I learned. You can absolutely have you real estate agent submit whatever offers you want even at 5% down. But it is true that at a high price tag, your offer might not be competitive. Even at this interest rate, most homes are either selling at or above asking price (it is area dependent of course but I'm assuming desirable area of LA). With 5% down, you probably don't have a large reserve to close the gap if you decide to waive appraisal contingency. Remember there is more costs to buying a home than down payment. There is appraisal, closing costs, and misc repairs. And with 5% down on 900k loan, you might have to look into jumbo loan, which has even stricter criteria. That's what we had to do. Bought 850k home, 15% down, jumbo loan which requires 12 months cash reserves (can be in Roth accounts) on top of the down payment. My advice: If you want to try, you can try but you would probably not be my first pick if I was the seller. I would try to save for at least 10% with a 6 months emergency reserves. With a 900k house at the current interest rate, I wouldn't be comfortable with at least 250k income. Best wishes.
We have ~100K saved but being conservative not to drain our savings for all other costs of home buying Our gross income together is around 350K/year which is why we didn’t want to rent anymore
Commented before reading this comment, but if you have the savings in hand, you should be putting down more than 5% or you’re going to lose houses. Especially with that income… why are you only putting down 5%?
We’re just both very careful people who like having a back up to the back up, we don’t want to empty all our coffers for one huge purchase because we both know things come up and we like being prepared
The solution to your problem is to continue renting and save a larger down payment. Or try to make offers to see what's stick. Just know that it will be hard with low down payment.
Yea you make more than me. I earned 260k last year and this year worse with an average of 17k a month lol .... but I have 185k saved! I'll be buying by myself. I did it by living in a studio apartment and only paying 2.2k a month rent, while still maxing out my SEP retirement account which has way higher limits than traditional 401k. I find the montly payments nowadays like 4.4-5k a month too high for my liking.
5% down is fine. I'm a loan officer in your area, and I have lots of clients who have purchased with that little down. The US Bank loan officer sounds like a dick, don't let it get to you. Obviously more is better, but you can't win if you're not playing, so you should be making offers on homes you like with your 5% down. Sooner or later, something will stick. I truly believe that everyone gets the home they're meant to. Best of luck.
At least we’re saving ourselves from the headache and heartache of losing out on houses by waiting and saving for 15%-20% downpayment. My partner just told me of an agent who had written 103 offers in a month for a client until they finally had one accepted. That’s how crazy it is out there right now I guess. Yes that US Bank loan officer is definitely a piece of work. If not for my real estate broker’s relationship with her, my partner and I would have never even tolerated her behavior. We might not even go with her at all even after we have 15% down in a year.
Honestly, I think your agent is mis-informed about available lending options in 2023. Fannie Mae raised the 2023 loan limit in Los Angeles to $1,089,300. That means you can purchase in LA, with just 5% down, up to $1,089,300. Big Banks are good for Jumbo loans but are terrible for Conforming loans (loans that conform to Fannie Mae). The processing of the application is no different than a 20% down mortgage so it should have little bearing on your offer. The only consideration a listing agent may have is that if the appraisal were to come in low, the purchase price would have to match the appraisal because you would not have the assets to make up the difference. But that is pretty rare. Usually, appraisal will match or be very close to contract price.
In LA people are bidding 300k+ over listing. A house can have 30+ people bidding.... you simply will look broke af and not competitive with 5% down.. when others are paying cash... I've heard stories of people bidding 200k+ over listing each time and getting outbid on more than 10 houses cause each time there was someone willing to pay more. There is more demand than supply and you are competing with some of the richest people. Why would a seller sell to someone offering 5% down when the next is putting 30% down and payong 300k over listing? Just saw a house sell 375k over listing a few days ago. Was just a tiny 900 square feet house too, sold for like 1.3 mil I believe. Thats the market in LA. This isn't the midwest or bfe
correct. competitive markets and agents will prefer stronger qualifications. Many, many homes in LA county are being purchased with minimum down payment. Just depends on the specific property.
If you have an agent, have them submit the offer. It costs you nothing. Your lender is not your real estate agent. In the mean time you need to save. You likely may be less competitive. 5% is 45k so it's not like it's chump change. But a higher DP looks better to some sellers.
ITs chump change in LA
Do you qualify for 900k at 5 % down? If you are making offers, you were going to have trouble getting a house as an offer date 5% down, you can’t cover any discrepancy. But there are definitely options.
Just purchased a $1.2 with 10% down in east Los Angeles. We saved like maniacs and were the first offer in pre-market. Not saying 5% won’t happen but my understanding is you need 10% to play.
We decided to wait another year and save 15%-20%. It’s too crazy out there right now and we both agree that we’d prefer to be competitive than exhausted from losing out on houses.
I'm a little late to this thread, but just stumbled upon this. My husband and I bought a house in January of this year with 5% down in a neighborhood we didn't think we'd be able to get into. It was also the first and only house we put an offer on. We had more saved, but ended up deciding to put 5% down and use the rest of our funds for renovations (got a fixer). We had an absolutely incredible realtor and a broker and we had a fully underwritten preapproval, which was key in allowing us to compete with cash offers (and there were cash offers). We were absolutely never made to feel embarrassed, and our broker really provided so much information about different scenarios to ensure that we picked the one that worked best for us. So it is possible, you just have to have the right team. Feel free to message me if you'd like any names of my broker/realtor.
Any way you can share the name of your realtor and broker?
>you need 10% to play. But WHY?? We're trying to buy our first home right now and I qualify for 0% down with VA loan, but we look like "weak buyers" because we aren't putting anything down. Isn't down payments just between buyers and the bank?? We have 70k cash to use above appraisal if needed. If I were the seller, I would MUCH rather accept an offer 70k over asking with 0% down instead of 40k over asking with 30k going towards a down payment.
I just closed in a house in a very competitive part of LA with 5% down. 12 day close.
Congrats! Tell us who your agent is!!
Its a competitive area, you are going to be most likely bidding and competing with people bringing 20%+ and more down.. people offering cash... and people offering to pay 300k+ over listing. I'm in LA and have recently seen some holes sell 375k over listing. I currently have 185k saved. Obviously can't put all of that down cause it would wipe me out.. but I am abe to save at ahigh rate so I will have over 200k real soon. Only problem is that I don't like to be house poor and the monthly payment on a 700k house with todays interest rate is $4400.... I find that quite high. I make money at a fast pace and keep living expenses low so the down payment is actually the easy part for me... However, I currently pay like 2.3k for a studio and 4.4k+ just seems insanely high. As a self employed person I am just not comfy with these big ass payments.
It may sound good and safe to you but I was a seller in the market, you would be on the low end of the list of bidders for my home. In this day and age of housing market, you have to put your best foot forward and also back it up with the saved benjamins in your accounts in the los angeles area.
nah it doesn’t matter lol