S/O of the how to save for a home thread: Where did you get your down payment? - Page 2

[Delilah83]

I am in the process of saving the money. I wish my husband's company had a matching program to put down 5% for a down payment. We have close to 25K saved up but we will probably not buy until we've got closer to 35K saved as a down payment/closing costs.

[BetsyS]

We put down nothing on an 80/20 loan. Stupid!!! Stupid!! Stupid!!! We are almost 5 years into the loan, upside down about $80,000, and we have zero equity.

Next time, we'll save up AT LEAST 20%. I think it just makes sense. If you can't save for the down payment, it's probably going to be difficult to own.

I am surprised at the "wedding money" people. I live in the deep south, and we don't really give money for weddings. (lots of china and silver, yes, but money, no). We got $500 for wedding money, which I thought of as "a lot". I bought (very nice) bedding. But, not a downpayment.

[KayleeZoo]

We put off starting a family and rented a tiny apartment while DH and I both worked full time to save the downpayment. The sale of our 1st house funded the downpayment of our 2nd. We've never had financial help from family or anyone else.

[Adallae]

We went with an FHA loan, so our down payment was more like 5%. It came from savings. We were going to wait until we had 20%, but with the tax credit we pretty much got everything we put down back, so it seemed like a good opportunity.

[Coconut Chronicles]

Originally Posted by KayleeZoo

We put off starting a family and rented a tiny apartment while DH and I both worked full time

This is what we did also. DH and I started saving as soon as we were married... we lived like poor college students for 4 years basically and delayed TTC. We put away my entire paycheck and a good chunk of DH's. Then the market collapsed and we were fortunate enough to find an amazing house in foreclosure that we could pay for in full.

[Austin'smom]

My first purchase was a 1 bedroom condo, in which I qualified for a first time home buyer program so I had to come up with $1,500. I saved for that for about 6 months, while I was house hunting. For my current home I came up with my 20% $50k down payment by selling the condo.

There are a lot of different ways people come up with down payments, some are better financial moves than others. I have heard quite a few people say they withdrew money from their 401k for a down payment, which I wouldn't recommend.

[honeybunmom]

My mom gave each of my brother and myself money for our downpayments. I'm in Chicago, so, when I was single and buying a condo, it was around $5K. My brother was in San Jose, it was a town house, about 10 years ago and $30K. He was also single at the time. That investment garnered him aroun $100K when he sold, which my mom let him roll the entirety into a 3 bedroom in Scotts Valley. He was married by then and both my brother and his wife had town homes in the same development (they met at the trash bins!), so, they both put the earnings from the sale of their town homes into the single family home purchase.

When I bought a single family home, I used money from a cash out refinancing I'd done on my condo a few years prior, but hadn't used the money.

All that to say, and saying it cautiously because the market sucks right now, can you save to buy something akin to a starter place on which you can make money upon selling. I know it's a stretch right now, I do. Or rent to own?

[Delilah83]

Originally Posted by BetsyS

I am surprised at the "wedding money" people. I live in the deep south, and we don't really give money for weddings. (lots of china and silver, yes, but money, no). We got $500 for wedding money, which I thought of as "a lot". I bought (very nice) bedding. But, not a downpayment.

It's definitely a cultural thing, in New York you're expected to give money. I have some relatives from NYC who were pretty generous but it wasn't enough for a down payment.

[choli]

Worked hard, saved hard, didn't fall into the consumer debt trap. Put 20% downpayment. It helps to do it before you have the expense of children.

My family were not in a position to hand out money for downpayments, my DH's parents were, but we would not have accepted it if was offered. We've always "paddled our own canoe". We have helped out sibling with downpayments.

[limette]

We didn't need a down payment for our house. When we sell it and buy the new one we'll either use some of the profit for a down payment or sweet talk the banker (she's already mentioned this) into not needing one again.

[annethcz]

We bought our first house when we were newlyweds with no children. We saved the money, but it was a small downpayment on an inexpensive townhouse. We were young (21 and 24) and just staring out and not making very much money, so my parents cosigned on the mortgage.

At that time the market was appreciating very quickly, so we used the equity in house #1 for the downpayment on house #2 two years later. We then used the equity in House #2 for the downpayment on house #3.

[cappuccinosmom]

Our original house, we used what had been my college fund (I had no intention of going, nor any desire to) to put down.

The other houses we've bought have been bank owned, and very cheap. We lived on about 2/3 of dh's income, saved the rest, and saved a good chunk of what we had from selling the first house, so were able to put cash down on all but one of those houses.

I must say, it helps not to be living in CA Where we live now you can get a good-sized house in need of a little cosmetic work for $100K or under. "Fancy" houses in "expensive" developments or upscale townships are in the $300-500K range. The only multi-million dollar houses around here are literally mansions and come with tons of acreage.

[phathui5]

Dh's mom gave us the down payment for our first house.

We've since moved out of state and are living off of dh's salary and saving his commission to pay for our next place in cash. The plan is to pay for 100% of the next house we buy up front.

[GuildJenn]

We saved up about 10% down, and then an inheritance and a loan from family got us up to over 20% which meant we didn't have to pay mortgage insurance. We paid back the loan over 8 years. (Total = $42k, that included closing and moving costs.)

How we saved at that time was we made it a game to see how low we could go in every area of our budget. We didn't have kids and that was our hobby. We were living in a small apartment and we had inherited furniture and we had no cable, no cell phones (common at the time), one computer between us, listened to the radio and went to the library, and shopped thrift stores if we needed clothes. However we were also young and in entry-level jobs.

The other big thing at the time was we had no car (public transit only) - that was a HUGE expense we were not paying.

[madskye]

I bought a condo when I turned 30 with my first BIG bonus check (7K) as the downpayment. That was 10% of a $60K condo in NJ that's worth 230K now, 10 years later. Even with the downturn in the market, I was in the right place at the right time. Right now I rent it out and we bank the income.

DH handled the downpayment on our house. He put down a 100K, which was amazing. He had a job in 20's where he traveled thru Latin America and lived ona per diem and banked almost all of his salary. And then he invested it in the .com 90's. So even after that market crashed he still had made money and thought real estate would be a more stable investment.

[Ruthiegirl]

We saved half and my mom gave us half. It was still only a 3% down payment.

[bobandjess99]

Originally Posted by cappuccinosmom

I must say, it helps not to be living in CA .

This. I think there are certain places in the US where you undesdtand that one of the "prices" of living there is insane housing prices. And for the people who choose to live there, they generally have something else that makes that price "worth it" to them - perhaps family, a great job, love the climate/culture, etc.

ME personally? I think it's insane. I live in the cheap midwest. You can literally buy HOUSES here for less than your $25 k partial downpayment. Ok, granted, not great houses in great neighborhoods, but they are available.
For $75K you can have a nice basic modest family home, for $125K you can have a NICE larger family home with a big lot, and for $200k you can have a gorgeous home in the country with some land. The "price" for these cheap houses? Well...you have to live here

So ya...anyway, as to your broader question, I think it's easier for most people simply because MOST of the country has more reasonable housing than where you choose to live. And yes, some people borrow from family, or are gifted the money. Some people get 95% or 100% loans, and DON'T save up the full 20% standard downpayment, although in the current economy, that's less of an option as lenders are requiring more for mortgages these days.

[dealic]

I plan to use my RRSP (retirement savings) for mine. I contribute 5% each paycheck and my employer matches that. I have about 12 000 so far, and expect to have close to 25 000 by the time I likely won't be working there (or at all hopefully) when our planned baby will arrive in 2 years. In Canada, I can pull 25 000 out tax free as a loan that I have I think 15 years to repay. If I choose not to repay it, every year I don't, I have to claim 1/15th of the amount as income. So if I am then not working because of the kids, that won't matter because it will be below where I would pay taxes.