How much cash are you ready to put down?
Well, it had better be a lot. Amid the hand-wringing in Washington over whether to formally require 20 percent down payments, out in the hinterlands the future is already here for many home buyers.
The average down payment is now up to 27 percent nationally, according to a stat cited recently by Fortune and Reuters and attributed to the Mortgage Bankers Association. (I hope to get the direct link later this morning.)
Certainly it's consistent with what I have been hearing from buyers here in Greater Boston, with 20 percent down pretty much considered a given unless you are trying to get an FHA loan.
Of course, it's a lot harder to come up with 20 percent down in the Boston area, where you need to be ready to spend at least $300,000 to $400,000, and often more, to get anything decent.
Reuters columnist Linda Stern takes the gloomy view, citing stats from the Center for Responsible Lending that say it would take the average middle class family 14 years to save up a 20 percent down payment. That drops to nine years if you can wiggle through with 10 percent down - and sock away $250 a month.
She argues skip the big down payment and take advantage of low interest rates to borrow to the hilt with an FHA loan.
Makes sense to some extent, but don't borrow more than $523,750 - the FHA limit for mortgages in Boston and the western suburbs.
That will get you into Natick but not Lincoln, Weston or Wellesley.
OK, sales haven't ground to a stop - they are actually on the rise as prices fall, even here in Greater Boston.
Buyers are coming up with the cash. So how much skin are you willing to put into the game?
