How do people get enough money home down payment - Page 3

[tamagotchi]

Originally Posted by mhurst

Does anyone seriously put 20% down?

Yes, we just bought our first house wth 20% down. Also, real estate here is very expensive (we paid $675k for an older three bedroom 1200 sq.ft. house). So we had to save for quite a few years to have the 20%. In retrospect we would have been better off buying earlier with less of a down payment, before house values skyrocketed.

[Thalia]

Maybe I am old-fashioned, but we are trying to save 20% for a down payment, and we are doing it by a). continuing to stay in our rental apartment for as long as it takes and b). trying to live beneath our means.

Some things that help are that we are debt-free, we have about 20% of the total in existing savings, we both work, and our rent is way below-market because I've been a tenant in the same place for over 10 years.

We created this goal back in January, and we are now about 50% of the way there. One thing I like about waiting is that it is giving us more time to see exactly how much we can put aside each month for a mortgage and taxes and still handle our usual expenses and emergencies comfortably.

We couldn't have saved this aggressively a few years ago, when I was a grad student and working part-time, and DH was starting his own business. But now we can, and I'd rather wait and save and risk the interest rates going up a little bit, rather than doing it now and taking out two loans to cover PMI.

[PiePie]

Originally Posted by mhurst

Does anyone seriously put 20% down?

We put 5% down and got 2 loans (one for 90% and one for 5%) to avoid PMI.

I'm not being sarcastic, does anyone these days really put 20% down? No one I know.

this must vary regionally. here in ny, everyone i know put 20% down except for one couple who did 10%.

[Juvysen]

Originally Posted by PiePie

this must vary regionally. here in ny, everyone i know put 20% down except for one couple who did 10%.

I'm in upstate NY and we did 5%

[MujerMamaMismo]

Is there any worth in putting some money (say 2%) into ethical investments with the hope of it growing to 20% within five years?

(is this a more complex idea than I realise? we're just starting to talk investment and I've got a lot to learn.)

[mommyddeville]

We bought a house 2 1/2 years ago. We put 5% down, and the sellers paid the first $2500 in closing costs. We only bought because, even with upkeep, it's cheaper than renting here. We were newlyweds, expecting our first child, and BROKE! Having the $5,000 for the 5% down (the house was $100k) was incredibly hard. We now have an 80% loan and a 15% loan for the rest of our mortgage.

Even if we had 20% to put down for a house, it would be better spent putting money away for retirement, in our case.

[SusanInItaly]

We did a VA loan and brought $2K to closing. It's paid off for us because we paid $115k for the house, which would sell for $185K now (3 yrs later), so then when we sell that house we will roll it into the next house. (this is not here in Hawaii, this was in Florida)

Your state might have programs for 1st time homebuyers. One of my friends did one up in Maine, they got a super low interest rate and no money down but have to live in the house at least 7 years or face a penalty.

[dharmamama]

Meghan, we financed our home through FHA, and we didn't need 20% down. Honestly, I don't think we put anything down, and we negotiated with the seller on who would pa closing costs.

dm

[CatsCradle]

We rented an apartment in a highly unfashionable section of Brooklyn, NY for years - whilst all our "tony" friends lived in the "cool" parts of NYC but paid good chunks of their incomes in rent. After about eight years, we had saved up enough (without much sacrifice) to put a down payment down on a cooperative apartment. We got a traditional fixed rate mortgage. What is funny about all this, is that we still pay less on our mortgage per month than most people in NYC pay in rent! That's a New York story for ya. I'm not sure how it is in other parts of the country. In the beginning, we really had to think long-term, and the patience paid off.

[myfairbabies]

We did finance it 100% (well, we paid $2000 but that was just to show we were serious or something) and had the seller pay the closing costs as part of the deal. Our mortgage is a bit high, but we wouldn't have been able to buy a house otherwise, at least not in the near future. Our APR is 6.25%, and we just bought this past February. A lot of areas have special deals with first time buyers.

[MCsMom]

We put more then 20% down on our first house and we live outside Seattle. My DH was in the Army and I was not working at an uber-high income job either. How we did it is that from the time we were married we only lived on one income (my DH Army pay) we were married for about 6 years before we had kids and about 7 before we got our house.

We both knew that we wanted one parent to stay home and from what we had been living on during college it was a huge strp up just to have one real income much less two. With the second income (mine) we paid off college loans, a car, and purchased some land with my in-laws that we then paid off. We also maxed out retirement and had an emergency fund. Then, my DH deployed almost the same time I was due to have our DD. I moved in with my parents so that I would have help with a new baby and we made a pact that neither of us would spend anything that was not absolutly necessary for the next year so that when he was done and got out of the Army we would have enough for a down payment. I would say we managed to say 70% of his income during this time (I was not working) while still paying our bills and retirement.

Then, he found a job, we sold the land and took our cash and used that as a down payment to get our payments where we could easily afford them and used the rest of the money to fix the house how we wanted it.

[oneKnight]

We got a FHA loan that also covered up to $6k in closing costs "free" conditional that you lived in the house for 5 years. (if you move before the 5 years you just have to pay it back) Not a bad trade-off IMO.

We saved up a little cash though just by saving $100 every month for a while. On two small paychecks we live well below our means, even though we struggle a little on just one.

[Melissaak]

We put 10% down on our house by selling stocks.

[griffin2004]

I recently sold my house to a couple who were first time homebuyers. They did an FHA loan which required 3% down, but they couldn't come up with closing. So we agreed to raise the price of the house and I would pay their closing. I came out the same in the end and they essentially just financed their closing costs. From what my real estate agent told me, that kind of arrangement is not uncommon.

You might also be able to do a real estate contract directly with the the seller (the seller "carries the paper"), negotiate whatever terms you can both agree on, and avoid the mortgage company altogether.

BTW, from the sale of that home I was able to put down 35% on my new house. Real estate CAN be a great investment ... or a total money pit.

[kijip]

We were able to qualify for a non-profit down payment assistance program for first time home buyers who buy in the city and buy houses under a certain price. Between that assistance and the money we put down from saving A LOT and a small inheritance, we were more than able to avoid PMI. We can afford the mortgage payment and still have money to save and that is one just one income while my husband is a full-time student. We live in a very expensive location and I run a charity (I do ok $ wise and we are frugal freaks but based on just my income there is no way we could have afforded a 20% down payment on 300K-400K homes for the foreseeable future). After my husband graduates, our income will at least triple but we will continue to live modestly to save for retirement and a house with a larger yard and to eliminate any student loans he takes on in professional school. The only people around here that I know who have put 20% down either got it from family or work in very high income fields. At my income level (not low income but not high income) there is the often the ability to pay the mortgage comfortably but not a house to buy in the area at an affordable price point. So some cities have non-profits or land trusts to help out these families. The HUD website lists legit programs for first time buyers by state. It is important to distinguish actual non-profit programs from scams used by sub-prime lenders. The mortgage we got is 5.5%, 30 year fixed and the payment is comfortable on our income right now and our income is due to rise in the near future. It was a good decision to buy now, not us buying a house we could not afford. We have no other debt and we have a comfortable emergency fund.

This allowed us to keep inheritance money for investments and education costs. And also, my husband was hellbent on making sure the we were in the house on our own means and not on the inheritance, which comes from a very nasty relative dying. He wanted to feel like it was our home and not due to his abusive family.

[meowee]

We were willing to live in a not so great/ kind of bad neighborhood, we borrowed 15k from my parents, paid it back over 5 years, and had 15k of our own. We paid off the mortgage in 5 years by being ultra frugal and during that time the house tripled in value, so if we buy again this house will fund our downpayment, closing costs etc..

[CynicalStar]

We took advantage of first-time buyers programs. At closing we paid $764 dollars, with no down-payment. Everything else was financed on a fixed-rate loan.

Ask your mortgage company, and then get a second opinion. The first mortgage company we worked with was out to make the most money for themselves & chose loans/grants/programs accordingly - they couldn't make two separate home deals work (ugh, we paid for two different home inspections!). We switched to a different mortgage company at our realtors suggestion, and they got us our first choice home.

[Herausgeber]

Not on the first house. But I will be putting 20 percent down on the second one, using a combination of equity from the first one and savings.

[2Sweeties1Angel]

We only needed $3,000 down and my Granny gave it to us. We were planning on paying her back even though she didn't want us to, but then she died.

[StrawberryFields]

We put 0% down and the sellers paid our closing costs plus $40/day rent to stay in the house 2 weeks after closing. We didn't pay anything out of pocket other than our earnest money and we got a check for about $1000 at closing.