How did you come up with your down payment?

[TBH]

I have also been saving for a downpayment since I was a babysitting pre-teen.

To the original poster: Now, when you have a lot of time ahead of you, is the time to save for a downpayment. Do not neglect other priorities like paying down debt and retirement savings, but I agree with everyone who has said start small NOW and build up slowly. In a few years you'll start fantasizing about condos and bungalows and duplexes and so on, and you'll be so glad you started saving before you really got the home ownership bug.

The nice thing about saving is that you don't have to decide ahead of time what it's for. You can start saving a healthy emergency fund now, knowing some or all of that money may go to buy your first home.

We put down 20% on a house in 2004. Purchase price was 70K, so we put down 14K. The down payment came from our savings, but there were a lot of really necessary renovations that we were able to do right away because our parents helped us out.

We were in a funny position. The downpayment was no problem. Our problem is we just don't have a high enough income to support high monthly payments. For the next house I buy, I want to be able to put down 30 or 40% so my monthly payments will be low. So only two years after buying my first home, I'm already saving for the next one. (I love my house, but want a bigger yard and other things some day).

[Ima saver]

Just save, save, save as much as you can!!

[getforfree]

We saved for our down payment for a year. When we got married, and we got married ourside of US, we didn't have much money. I stayed there for about 6 month, and we both didn't work. Then, when Dh, documents were ready to move to US, we moved here, and I was 4 month pregnant at the time. Dh didn't have a job because he didn't know the language, so he went to school for about 6 month.

I was a student and was working part-time. We were living on less than $700/ month that time. But we had a car which was worth about 6k, which I had before we got married. That time our rent was little over 500, + some utilities, plus gas and food, and we still could save about $20 every month. When my son was born, I went back to work and school when he was only 3 days old. I was brestfeeding him too, and that's a lot of work. I used to carry the pump and bottles with ice packets with me everywhere.

When my son was 2 month old, Dh started working full-time and I was still working part-time. That time we really started saving. When my son turned 1 y. o., we had 17K in savings, while making about $1500-$2000month, each month was different. But we really were saving, no eating out ever, no intertaiment, didn't even have tv, but had some decent furniture for about $2000 al together, and 2 cars.

We bought small house for 205k, that's the cheapest you could find in normal area, and the house needed tons of repair, including replacing some of the wall parts. So we spent all our savings, plus were spending most of our income later on for the mortgage payments and the repairs.

But we did all the repairs by orselves. I was about 1 month pregnant with my daughter, when we bought the house. Dh and me did all the repairs by orselves. We were spending everything we were making.

I went to the first pregnancy check up when I had only 2 weeks until my due date. Those doctors are no use anyways, and I just hate to waste my money, while not getting anything useful. My daughter is healthy and has never got sick, not even a cold. And I was helping my dh with the repairs, even painting and was climing on the roof while pregnant. Everything turned out just fine.

Now we have the nicest-looking house on our street, too bad, not the bigest one. Our house is too small for us, so I better not have any more kids, but I can't complain. That's all we can afford. Our house is worth about 320K now, while we paid only 205K+15K in repair supplies. It would cost much more if we would have to hire somebody to change the roof or do the texture outside and inside.

Sorry, it's too long, but if we could save money for down payment in the most expencive area while not making much, anybody can do it. You just have to control your expences, and don't follow everybody's advice, some people would just scary you with their advices, like that whatever you doing is too dangerous. It is dangerous, but doable.

[wouql]

To the original poster: Now, when you have a lot of time ahead of you, is the time to save for a downpayment...In a few years you'll start fantasizing about condos and bungalows and duplexes and so on, and you'll be so glad you started saving before you really got the home ownership bug.

That's exactly what I'm trying to decide: should I be saving before I even think about buying? Like I said, I just renewed my lease and buying anything isn't even on my radar screen.

But it only dawned on me lately that saving that kind of cash is going to take a long time. (Clever, aren't I?) My plan was to take all my extra money and push it towards paying off my car early: I could probably finish paying it off in a year. But that means when my lease comes up again I'll be in the same situation (with nothing saved) and it'll be at least another year.

Decisions, decisions...I'll figure it out soon.

[TBH]

wouql,
Debt repayment IS saving, as long as you are also changing your life and strengthening yourself psychologically so you don't accumulate more debt.

I would say figure out the max you can save each month. Then put half of that toward early car repayment, and half of it toward savings. The savings will allow you to buy a house, or buy your next car for cash, or whatever. Once the car is payed off, funnel ALL that money toward savings. That's the trick with debt--to make the payments forever, even after the debt is gone. You're already used to living without the money that was going toward the payments. Retiring a debt is a great way to increase the amount that is going into savings.

If you don't have an emergency fund, then attend to that before you pay extra on the car. Make sure you have at least a month's living expenses, maybe up to 3 months depending on how stable your job is and what your comfort level is.

[Ima saver]

I agree, I paid off my dh van last christmas. I still make that payment to myself every month and put it in the new car fund! (which earns interest at the bank)

[WellManicuredMan]

What I find hard to do is saving for retirement while also saving for a house. I'm trying to do both at the moment. Some days I'm excited about my retirement savings growing and other days I'm dreaming about a house and second guessing that extra money I put into a retirement account instead of my downpayment savings.

[ummabdullah]

We are currently planning on buying a house.. and need a 10% downpayment.. I'm hoping to ask my mother in law for a few bobs.. since she doesn't buy us any presents .. and this was her promise to us.. that she saves for when her only son may need it..

I also plan on asking the vendors to give us 5k or more cashback upon the sale of the house.. It will cost more in mortgage for us... However, I have 2 kids who need a good school.. and think all that suffering for a few years is worth it..

I figure after 2 years my hubby should be making a bit extra and we will not increase on our standard of living.

All I need our 4 bedrooms, garage, and garden.. That way I can have 8 kids and bunk the boys and girls in seperate rooms and have a study/ nursery.

[gotalkmoney]

I was in your shoes. I moved out when I was 20 and was able to pay my rent and bills but I had no money left over to save.

What I decided to do was pick up another part time gig developing/programming webpages with a friend. I used all of that money to save up for a nice down payment. After about 2 years, I kept it in a money market account collecting 4+% APY and after awhile it kept adding up.

Just watch how you spend your money. Don't eat out as much, don't buy clothes every other week cause their in style, etc. I'm sure you've heard it all but just make a simple spreadsheet and watch where every penny goes.

[Ima saver]

I robbed a liquor store!!

[greedy4chips]

Diva did it the same way we did our 2nd home. First home was $3500 down (5%) on a $70k home. We paid $94/month PMI. We were suckers.

With knowledge in hand I spoke to our next bank about doing the 80-15-5 plan. He was amazed and had never heard of that.

Basically 5% down, a loan for 80%, and a 2nd loan at 15% to avoid PMI. Some banks will up the rate of the 2nd loan, but that is not a problem.

Now the benefit to doing this is PMI is not tax deductible, but the interest on the 2nd loan is deductible. Of course this is only smart if you have a positive difference, PMI amount minus interest paid per month must be a positive number.

PMI is such a waste of money because so many people do not realize that once your home's equity reaches 20% of its value you can have the PMI removed...the lender does not have to remove it. Also, you can have your home appraised after a period of time and if that new appraised value gets you above the 20% you are free and clear of the PMI.

The other problem with PMI is some forget about it and just don't even realize they are paying it.

I have saved people many thousands with this knowledge. My ex coworkers use to call me their financial advisor. The only problem is I usually advised them of stuff that had nothing to do with their current situation, but every once in awhile I would get someone saying can you refresh my memory on how that works again.

I am no guru, I just pass along knowledge and do it freely and most of the time unwanted at the time, but I cannot help myself because I feel so ripped off no one shared it with me earlier in life!

The saying "You can lead a horse to water, but can't make him drink" always comes to mind, but for me it is slightly different..."You can lead a horse to water, whether he drinks or not is up to him!"

[geojen]

Originally Posted by DivaJen

My husband and I (fiancee at the time) sat down and figured out the maximum we could each save each month, and then we did it. We were both teachers at the time, and we saved a 5% down payment. I think we saved for a year and a half - hard to remember now. When we bought in 1997 we had an 80% 30-year first and a 15% 15-year second, avoiding PMI in the process. Since then we have refinanced to a 20-year fixed loan with about 17 years left to go.

Not to be rude, but were the payments for that 15% loan outrageous? My husband and I are looking to buy a home in a little over a year, and will probably able to scrape together about 5% for a down payment. We were thinking of piggybacking loans to avoid PMI, and I was just wondering how that worked for you...

[getforfree]

A year after we bought the house, the value went up, so we had less then 80% owed compare to a house value. I called the mortgage company and asked them to remove PMI.

I had house appraised already. It took about 2 month and I had to call them almost every day, untill they finally did it. First, they were saying that it can't be removed because it just that the value went up, we didn't pay off the 20 %. So I had to send them a 2-page list of repairs and improvements that we did to out house and that's why it costs more now. Than they said, it has to be 22%. Fine, We had like 24% equity. But I had to remind that to them like 5 more times. Then they said, it takes 40 days for the process of removing PMI.

Some of their workers don't know basic math, so I told one of them to go back to middle school learn some math before telling me that I am wrong. That was when the girl there said that equity wasn't enough, while we had 24%.

It was hard to remove pmi, of couse the mortgage company doesn't want to lose extra free money, and I don't want to waste it on them.

[xs4all]

I havent bought a home yet. I have been renting in the same house for 12 years. Living in MA in expensive( like alot of other places) I live near the water, and nothing here is under $330,000. My son is 18 and im looking to buy a townhouse in a few years. Im in no rush. I need to pay off my car paypent first. This will be my first home , so im hoping to get a good deal being a first time home buyer.

[cashqueen]

DH (wasn't DH at the time) had money from a mutual fund his grandparent's started for him when he was 10. WHen we moved and bought a new house our first house had appreciated enough to put down a good downpayment.

[LuxLiving]

I had worked three jobs so I could save enough and got help w/first time buyers bond money back when I was single and bought my studio condo. I continued working those three jobs so that I almost had it paid off (something like 3,000 remaining) when The Hubster and I married low those many moons ago. Too small for us as a pair, so being a team player, we sold it and rolled that over into each house afterwards. I wish now we had kept it and leased it all these years! ...and stayed in his apartment long enough to save up for that second down payment. Wouldn't I be happier? I think so. Who knows!

Hindsight!!! Cloudy at best.

-LuxLivingFrugalis

ADDITION: My mom pushed (= distinctly heavy motherly encouragement YOU BETTER DO THIS NOOOOW) for me to buy early on - I think I was maybe 19 at the time. It was hard to make those early payments but worth it in the end! My Mom has always kept herself well informed on financial news and was aware of the bond programs that were being touted at the time. It was a good thing for me to do! That and she wanted me in a gated high security condo so she could sleep at night! Moms - Ya Gotta Love 'Em!!! Thanks Ma!!