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Comment by sjg007 | Hacker News Reader

If you can muster up 10k-15k you can buy a $300k house with 3% down. There are down payment assistance programs as well. After a few years you can refinance to remove PMI etc…. It’s not impossible but it is certainly difficult.

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Unfortunately if the OP is located in California, there are very few places left in the state where one can purchase a home for just $300k; these are generally places in the southern half of the Central Valley (e.g., Fresno, Bakersfield) or places in the far north of the state (e.g., Chico, Redding). Sacramento, my hometown, is no longer cheap; last I checked the average price for a home there was around $440k, and homes in Sacramento's nicer suburbs tend to average in the $500k range (and homes in Sacramento's walkable core are even more expensive).

There are out-of-state alternatives where $300k is doable such as Las Vegas, Phoenix, and Houston, but if the OP is a lifelong Californian like myself, then moving to another state may be quite a change.

I'm in a similar situation as the OP. I currently rent an apartment in a coastal area near Silicon Valley that I love. I can afford to purchase a place up to about $425K based on my income, savings, and DTI, but $425K isn't enough to purchase anything near commute distance from Silicon Valley, and while I could have afforded Sacramento two years ago, the pandemic-era rise of prices in the Sacramento area have priced me out of the neighborhoods I want to live in. Thus I still rent.

You can afford condos on both sides of the bay.

I'm very interested in a low down payment, not to buy a house beyond my budget, but instead to avoid locking in more cash than I have to. Could you recommend any guidelines or important factors for me to determine whether I should prefer minimal down payment vs standard (>=20% iirc)?

Are you planning on living there for a short period of time (<~5yrs)? It may end up being cheaper overall to pay minimum down and go with the private mortgage insurance and a 30-year mortgage so you pay as little as possible while you're living there. But if you're planning on staying there long-term, a 15-year mortgage may be a better option.

How good is your credit? If it's good and you have a high income to debt ratio, your PMI will likely be pretty minimal. If so, you may end up netting better if you invest what you'd put down and let that money grow instead. Or you can put some of that into points for lower interest rates.

These things are pretty easy to figure out if you know what your home budget. There are a few places you can get rough estimates based on your credit score.

What would a "pretty minimal" PMI look like? My partner and I both make pretty good income and have zero debt. I've heard about places like Ally where you can get a mortgage estimate without a hard credit pull; is that the kind of thing you mean?

I wasn't talking about an actual estimate just a rough listing of your options like this [1]. A pretty minimal PMI could be like $50/month depending on the cost of the property, and there are some calculators for that too [2].

[1]: https://www.bankrate.com/mortgages/mortgage-rates/?mortgageT... [2]: https://www.hsh.com/calc-pmi.html

You should do the research. First, check with a local bank within your state. Then check out of state lenders.

While you are doing that, see if you can get a Naca loan.

https://www.naca.com/purchase/

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