The Villages #1 for Highest Down Payment
 

I believe that is because many come to the Villages with money to put down. It is not that it is a required down payment. Also there are no first time buyer deals in The Villages.

It is a retirement community. Folks have cashed out of their old homes, frequently pay all cash and usually downsize to lower their overhead.

Exactly right. It’s not required. The style of writing is making it sound that way though.

The article’s headline says, “Cities Where You Will Need the Biggest Down Payment to Snag a Home.”

The article is a classic example of writing based on a keyword search or an algorithm by someone with no first-hand knowledge, but with space to fill. The word ‘need’ is misleading. More cash buyers and big down payments? Yes. But the reasons are unique to TV and topping the list skews the other rankings.

Word choice matters, real information does too — but nobody much seems to care anymore.

Boomer

There you go again, confusing people with the facts! Just stop it!!!!:1rotfl::1rotfl::1rotfl:

There was a statistic printed when we first moved here 4-1/2 years ago that 55% of the homes sold were full cash deals.

At our stage in life I couldn’t imagine carrying a mortgage I don’t even like auto loan payments with 0% interest. But then again people love reverse mortgages

We took the mortgage since our investments are making almost twice the interest rate on the mortgage.

All these things are a matter of opinion. It is a financial as well as a personality decision. Can't imagine carrying a mortgage. People finances and understanding of money are far different. Free of a monthly bank payment? You still pay common charges, taxes, water etc. A mortgage is the cheapest source of money there is. Whatever the amount is do you come out ahead with that money in your house or can it earn more elsewhere?

Auto loan with zero interest. You are usually offered zero interest or $$$$$$ off. Which is the better deal? The answer is usually-it depends.

Qualifying for a mortgage. You need to show income to pay the mortgage. I was amused when I was told to get a letter from my brokerage that they will send me $$$$$$ per month so I could fill in the line on my mortgage application. The bank told me to do this. The brokerage has a form for this. Reality, after you get the mortgage, you can call the brokerage and stop the checks.

There is no shortage of choices. We all need to pick what is best for us understanding risks and rewards.

I think most of us have been on both sides of the issue. We sold our previous home in another state. The deal was full price and a cash deal-that was roughly 10 years ago.
A great deal for us. We all know of cases where you draft a contract, the property is essentially off the market and then the buyer can't get a mortgage. Perhaps, the house does not appraise for that value or the person overstated income, understated debt etc.

A large down payment, vastly reduces the bank's risk but does not reduce the interest charged. It may prevent your paying mortgage insurance. You are paying to insure the bank's risk.

Real estate is truly different financial world. No other loan is, can be so highly leveraged.
Interest can be deductible. The real owner is often the bank. The person whose name is on the deed, cannot pack up the house or land and move it to another state or country.

The current (very) low interest rates make carrying a mortgage much more attractive, leaving the funds available for investment gains (which should be significantly higher than the mortgage rates). Add in the interest deduction on your taxes (if your home in TV is your primary residence, or an investment property), and it's even MORE attractive to carry a mortgage...

We put down 25% on our home in TV, mostly because we still own our home up in the DC area (for now)... Once I fully retire and we become Frogs, we'll sell the house (which is paid off), and decide what to do with the remainder of our mortgage.

We may decide to invest in a small condo up here, since that's where the kids live, but we'll make that decision when the time comes, once we see how often we travel back to the DC area...

Agree, paying cash just doesn't make sense at this age (77). Plus it is unlikely a 30 year mortgage will be paid off. Paying cash for stuff at todays interest rates and investment return is giving money away.

IMHO it can make sense to highly leverage one's home with a large mortgage and it can make sense to own a home free and clear. It just depends.

When I was young, starting out, I always borrowed as much as possible on a home. I itemized deductions so the interest (and RE taxes) were tax deductible. When I sold a home it had inevitably appreciated and its gain could be deferred upon purchasing another home above its sale price within a certain period of time. I then invested whatever cash I might have put down on the home elsewhere. The internal rates of return on my small down payments were fantastic.

In today's tax environment I no longer itemize deductions so cannot deduct interest on a home mortgage. Granted, mortgage interest rates are historically low, around 2-3% so if one can make more on their investments after taxes that option can still make sense. Given stock market performance over the past dozen years one could have done very well obtaining a mortgage and investing cash that could have paid for a home. Homes too have appreciated so perhaps this has been a win, win, win situation. A couple can sell a home and if certain residency and holding period conditions are met pay no tax on up to $500,000 in gain.

On the other hand at my age of 79 I am no longer comfortable with much debt and am happy to live in a free and clear home. It has greatly appreciated, my stock market investments have appreciated. Although I have left some money on the table I have slept well.

14 homes or condos some very expensive, I never put more then 20% down it’s always made financial sense to me and especially during these time of very low interest rates . I just got the last mortgage in April at 82 there’s nothing wrong with good debt

Depends on your investments.

We had to borrow against ours just to afford our house because of our particular circumstances. If we die together tomorrow, our "estate" won't owe anything to our investments (which are actually insurance policies with nice cash values), and it'll get a house that it owes nothing on. No debt collectors at the door of our next of kin demanding their payment.

We have nothing, but we also owe nothing. I personally feel this is the best option when you're older.

We were pretty much in the same situation. Not everyone can afford to pay cash to live in TV. But it has been the best move we've ever made.
:bigbow::bigbow:

Yep we must be just stupid because we don’t owe anyone anything except the tax man unless my wife took out a loan that I don’t know about :bigbow:

The procedure and terms for cutting a house in The Villages has been the same for decades and are non-negotiable. If you want to buy a house here you do it The Developer’s way. If that’s not acceptable to you, look for someplace else in Florida. They’ve sold about 65-70,000 homes the same way.

It was definitely required. And they wanted it within 5 days. As for first time home buyers, there certainly could be if you haven’t owned a home in the last 3 years.

We did the same. We could payoff our mortgage at any time, but I’d rather keep it invested.

I think Tom Selleck said it best....

We did the same. Was only getting 1% on saving and pay 2% on mortgage. Saving has only what need for six months bills and rest put in safe investment current getting better than 4%. In other words I’m making money buy using the bank’s money each month. Plus if I want to make home improvement or special trip of high value don’t need to asking for a loan.

Not being critical of what anyone else would do, but being deep into retirement, I would never buy a home where I could not pay 100% cash.

Bought used and used MLS. I don't like dictators.

We bought our first home in Florida in 2008, which would be our winter home. I applied for a mortgage so I would not have to sell investments or close out CD's. Two different mortgage companies would not give us a loan (credit rating 815) because I did not have a job or regular monthly income. We had enough liquid assets, all provable, to buy the house 11 times. I lost all respect for the intelligence of mortgage companies.

“This is not your father’s Oldsmobile”
 

Things are not like they once were when the standard good advice was to have a paid off house in retirement.

There are many people who have dependable cash flow from investments and pensions. As long as that cash flow is solid, I can understand why taking out a mortgage could be a good decision.

Borrowing is so cheap right now and has been for years. Cashing out long term investments to buy a house might not be the best move for retirees anywhere — not just in TV.

There are a lot of buyers who come to TV with cash-in-hand from selling a paid for house somewhere else. Slapping it all down on the new place is what a lot of them choose to do.

But there are others who take a close look at their overall financial picture and decide if they want to do something else with all that cash — like a big down payment and invest the rest or just sit on it for a while to see what happens.

As long as a borrower knows that a mortgage obligation can always be met, it can work out well to borrow some cheap money. A lot of people decide to do that because they know they have the assets to be able to pay off the mortgage any time they want to. . .

So let’s not engage in any mortgage-shaming, OK?

A lot of those mortgagors in TV could write a check for a house if they wanted to. They know where their money is and what it is doing and have made the decision accordingly.

Of course, a paid off house is a good thing, too. It’s just that the old rule can safely change for some in this era of cheap borrowing — as long as they know that they are not risking the roof over their head.

Boomer

"Buffet was talking real estate because he recently put the Laguna Beach home he bought for $150,000 in 1971 on the market for $11 million. The $150,000 price tag was pretty steep in 1971 – it would translate to about $900,000 in today’s dollars – and Buffet took out a mortgage to buy it. 

Buffet explained that he took out a mortgage for about $120,000 to buy the home and spent that same amount in cash to buy Berkshire Hathaway stock. If he gets close to his $11 million list price, Buffet will make nearly seventy times what he spent for the Laguna Beach house. But more importantly, his decision to get a mortgage and use his cash differently, paid off even bigger.  

Here’s what Buffet told CNBC: ”I thought I could probably do better with the money than have it be an all equity purchase of the house. I might have bought 3,000 shares of Berkshire or something like that… so that’s [worth] $750 million [today].” "

From: What does Warren Buffet think about 30 Year Mortgages? | Total Expert

The required down payment on a newly built house in the Villages is 10% to enter a Purchase & Sale Agreement. Not at closing.

It all depends on your "comfort" level not sleeping well or a constant uneasiness is no way to live, reducing one standard of living at this point in life is cause for depression. On the other hand as many have pointed out all the financial advantages , taxes, appreciation of a single family house argue for some level of leverage and investing the difference ,, but first and foremost your comfort level