How did you come up with your down payment?

[sakigt]

Re: How did you come up with your down payment?

Depends on where you live.

I got financial assistance through a state program for my down payment, the only downer is I have to pay PMI, a whopping $50 a month for me.

$50 a month X 24 months = $1200 extra cash

BUT!

$121,000 Purchase Price
$127,000 Home value @ Closing
------------
$6,000 instant equity

The condos are reselling already for $134,000!

For me, paying PMI was definitely the smart thing to do. Yes, waiting and saving the 20% can help you to avoid it, but at the expense of the type of home you are looking for appreciating!

Make some phone calls! Now, when youre young and poor! lol, is the time to buy a home.

[tgavin71]

Re: How did you come up with your down payment?

We saved for our first deposit. 10% of $114,000 in 2001. We had to pay mortgage insurance. We have just refinanced and using the equity that has built up we were able to get a new mortgage with a down payment of 20% which negated the need for mortgage insurance.

[Fern]

Re: How did you come up with your down payment?

i put down about 45% (about $95,000) on my 1st house 10 years ago.

I was able to do that becus i had received 2 inheritances from both of my grandmothers when they passed away, plus I saved for many, many years. I bought the house when i was 37 and still a single woman.

couldn't have swung it otherwise becus my income is more modest.

[Snoopy2645]

Re: How did you come up with your down payment?

Well my first place was a trailer I saved for a downpayment for that for years I wanted out of my parents house ASAP!!! I think I was around 13 when Is started saving for a trailer by the time I bought it at 18 I had 6k to put down & I already had a baby so it can be done. I wanted out because of problems at home my parents had from way back I couldnt take it much longer!!! Then with my house I bought it at 22 I had 1/3 of the house price for a down payment I used an inhertence from my dad & some of my savings for it the down payment. I would save as much as possible if you want to save for a house because like others stated you should have at least 20% down

[TBH]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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

[getforfree]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

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]

Re: How did you come up with your down payment?

I robbed a liquor store!!

[greedy4chips]

Re: How did you come up with your down payment?

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!"