[safari]

If I had waited until I had 20% for a downpayment, I would have never become a homeowner. I live in Southern California, where real estate costs an arm and a leg. I started looking for a condo back in 2000, and every month the prices were going higher and higher. I took a risk in the summer of 2001 and bought a condo for $340,000 with 5% down and took out two mortgages -- the first mortgage had a variable APR, which was around 7% at that time and was changing every month, and the second mortgage was fixed at 11%. My income was only $72,000 at that time. After paying the downpayment I only had about $3,000 left in my emergency fund, but I was counting on several things: 1) my income increasing, 2) interest rates going down, 3) house appreciating in value. The risk paid off. In 2003 my condo was valued at $420,000, and I was able to consolidate both loans into one and refinance at 5.375% 30 year fixed. Today my condo is valued at just under $700,000, and I wouldn't be able to buy it now, if I had waited, even though my income has increased quite a bit since then.