[ErikaLeigh]

DP and I were discussing today starting a plan to buy a house.

We will need a house that has at LEAST 3 bedrooms in it. Neither of us want something that is huge, I like cozy!!

So our discussion is how long should we give ourselfs to be able to save up the cash for a down payment?

And we were also advised that around $5000 is enough for a down payment normally.

We also won't be looking for a brand spanking new house! We are wanting a nice but needs some love house! We did have a bid in on a 3br and 2bth house that was in forclosure for $28,000. but we didn't get it!

Advice and opinions?

 

[Paxjourney]

We purchased our home in 2004, we went with a traditional 30yr loan with 20% down (against the advice of several friends and the mort. broker

)

Our 20% down was $20k. It took us 3 yrs of saving to do it at the time DH was in the Navy E6 paygrade.

 

[mtm]

I like 20 per cent down, 15 year mortgage if you can do it. I'd be willing to do a 20 year mortgage. I'd look around at house prices and then do the math on one of the mortgage calculators. As for how long to save up your downpayment, what's your budget look like? How much can you put away each month? How badly do you want in a house/can you make cuts etc.

 

[Denvergirlie]

I too will be in the 20% down category, so it really depends on how much the 3BR houses are in your area as to how much that 20% down would be.

 

[umbrella]

You would need to have cash available just for some of the costs associated with buying a home, and depending on the total cost, that $5000 might just take care of that, and you'd effectively have no downpayment. I would aim to have at least 10% plus more for costs, but really, I think 20% would be much better.

 

[Ola_]

I agree with the 20% - it lets you avoid paying PMI and will give you some equity in your home right off the bat. It took us a few years to save that up but it was worth the wait. You will save money also because you won't need to pay interest for that chunk of your mortgage. You will need to know what the closing costs will be, a few thousand at least from what I recall, and save up for that in addition to your down payment.

If you are looking for a fixer upper then you need to have additional money set aside for any immediate fixes that need to be done. Plus even a house in good shape will likely have costs associated with it that you hadn't planned (may need appliances, yard tools like a lawnmower, window coverings, replacement smoke/carbon monoxide detectors for each level). Home ownership is expensive!

I wouldn't put a time limit on it though - rather figure out how much money you need, make a plan, and start saving.

 

[savithny]

Don't forget closing costs, which are *in addition* to your down payment and can add up to 3-5% of the cost of the house, too (depending on your area and the cost of the house, obviously).

You need to do the math to see what kind of house payment you can afford, do the math to see what that converts to as a mortgage (be sure to include taxes and insurance in that payment), and then figure house much house 5K would be 20% of - and see if that will get you what you want.