What's the ideal way to save up for a downpayment on a house?

[Broken Arrow]

In the 401k thread by WellManicuredMan, it was mentioned that you can withdraw from your IRA for a downpayment for a house.

Is that the really best way to go about saving up a house? Or, are there better ways?

[sakigt]

Re: What's the ideal way to save up for a downpayment on a house?

No!

Ask around. Look up first-time homebuyers programs.

Due to my low income I qualified for a $25,000 down payment assistance program. I paid a total of $1,500 (the downpayment) towards my new condo.

Closing tomorrow! Woot!

[Fern]

Re: What's the ideal way to save up for a downpayment on a house?

NO! The best way to save for a house is to have regular amounts automatically deducted from your paycheck into a special account designated for the house. You don't even see the $$, it just gets deposited there from your paycheck.

If you have to mortgage your future to finance today, in my opinion, you're not ready to buy a house.

[markio26]

Re: What's the ideal way to save up for a downpayment on a house?

good comment fern, that is exactly what i was thinking.. all the comments were informative.

[Ima saver]

Re: What's the ideal way to save up for a downpayment on a house?

I would agree with Fern, have the money taken out of each paycheck. Join the $5000 challenge and see if you can go beyond $5000!!

[shengmei]

Re: What's the ideal way to save up for a downpayment on a house?

I know that ibeing n College Station and being a grad student automatically qualifies me for down payment assistance.

Now I just have to look for a house both dh and I like. We have very different tastes when it comes to housing. I am very interested to see what the outcome would be.

[sakigt]

Re: What's the ideal way to save up for a downpayment on a house?

I know that ibeing n College Station and being a grad student automatically qualifies me for down payment assistance.

Now I just have to look for a house both dh and I like. We have very different tastes when it comes to housing. I am very interested to see what the outcome would be.

Dont worry about the house part yet. Save some money then get prequalified. It took me a little over a month from getting qualified to closing. Thats one heck of a month for expenses to be rolling in. Ive done it very cheaply and still spent at least $1,000.

[Broken Arrow]

Re: What's the ideal way to save up for a downpayment on a house?

You can have my ex, rexdart. She will burn right through your money though. I mean, she's not a bad person or anything, but from now on, I'm either going to go with someone who has half a financial sense, or I'll settle with being single for the rest of my life.

[Snoopy2645]

Re: What's the ideal way to save up for a downpayment on a house?

Well I started by saving my tax returns I was single & had daycare expenses so I got big returns I put each one away & saved for about 4 years had quite a bit to put down I would save those or a little each paycheck like above poster stated & then go from their.

[lrjohnson]

Re: What's the ideal way to save up for a downpayment on a house?

I've had this question.

I don't have a 401k at work; I have CalPERS pension, and I also contribute to a 457 plan. I have a small regular IRA.

From reading these forums I plan to stick $4000 in a Roth IRA this year, and I've subscribed to Kiplinger's Personal Finance. I also moved $6k from a 1 percent account account to 4+, yes the ones I got bonusses for.

I'm not sure yet if I will be able to buy-I'm in California, and prices are crazy. I will not qualify for any low income assistance, though there may be city specific monies available for first time homebuyers to encourage positive growth in certain neighborhoods.

So I'm not really sure where my House Money should be. Should it be in a very safe %4 account? Can it be invested?

I know there's a range here in answers. It reminds me of emergency funds: some might be cash under the matttress, some safe accounts, some laddered CDs, some invested with some risk, and it all depends on the amount and possible emergencies and knoledge of the person.

What do you guys do when you are saving a large lump for a specific purchase, such as house or car replacement?

[DivaJen]

Re: What's the ideal way to save up for a downpayment on a house?

In the 401k thread by WellManicuredMan, it was mentioned that you can withdraw from your IRA for a downpayment for a house.

Is that the really best way to go about saving up a house? Or, are there better ways?

We did it the old-fashioned way - we looked at what we could save each month and then put that away as soon as we got paid. Out of sight, out of mind. We saved about $11,000 in a little over a year from two teacher salaries when we put our minds to doing it.

[cbmeeks]

Re: What's the ideal way to save up for a downpayment on a house?

We did it the old-fashioned way - we looked at what we could save each month and then put that away as soon as we got paid. Out of sight, out of mind. We saved about $11,000 in a little over a year from two teacher salaries when we put our minds to doing it.

Admit it, it was hard giving out that $11,000 right? I know it would be for me. STILL, it's what I would have done if I had it.

[slimcustomer]

Re: What's the ideal way to save up for a downpayment on a house?

A withdrawl from an IRA for a downpayment on a house is often an excellent idea. Of course it is better if you can fund an IRA and save for a downpayment at the same time. Even with today's lower downpayment percentages, though, its non always possible to do both. Saving money towards the purchase of a first home intentionally in a traditional IRA can have multiple benefits. First of all, you are able to accumulate money faster because of the pre-tax nature of your savings. Secondly, people often enter a lower tax bracket upon purchasing a new home because of the ability to itemize deductions. Shifting your distribution to a lower tax bracket saves you money. Furthermore, you haven't "blown" your IRA investment. You have just shifted investment vehicles, with much of your future appreciation shielded from tax through the home sale exclusion.

[Ima saver]

Re: What's the ideal way to save up for a downpayment on a house?

When I first married, I saved about 30% of my paycheck towards a down payment of a new house. I would get my check, go to the bank and put that 30% right into savings. (no auto deduct back then) I scrimped that whole first year and a half. I bought nothing new, no clothes, no nothing. I saved enough for the down payment in a year and a half. I was 21 then. I was mortgage free at age 31!

[Ima saver]

Re: What's the ideal way to save up for a downpayment on a house?

I would keep my down payment money in a safe savings account, paying 4% or more! You don't want to have your house money in mutual funds or stocks!