how do you come up with a down payment?

124

Comments

  • GraySaturdayGraySaturday Posts: 2,878
    Thecure wrote:
    i live in Toronto where ave. house costs around 500K. teh ave. 1bedroom condo cost 270k. i make around 48 k a year. i am a social worker. i have been working for teh past 17 years,i am 31 now. what i did is save 200 a month since i was 21. that gave me 24k. i just bought my first condo in toronto for 260k. it is hard. what i sould suggest to you is take out a private loan (if you can) for the downpayment and when you buy your house rent out a part of it to pay the laod back. i don't know if you are interested in having another person living with you but it would help.

    We'd only be buying a one bedroom condo, or maybe one and a small other bedroom/office/den..

    I don't think anyone would want to live with my husband and I... and my 40 cats ;)
  • fanch75fanch75 Posts: 3,734
    Thecure wrote:
    i live in Toronto where ave. house costs around 500K. teh ave. 1bedroom condo cost 270k.

    Good Lord. To hell with that. Why not move out a bit and commute into the city or find a job in the suburbs? Those prices are insane. Only speculation can drive up prices that high, it makes no sense. Is there a housing bubble in Toronto?

    $500k here would build a very, VERY nice house!
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  • MrMerkinballMrMerkinball Posts: 1,978
    This thread isn't an argument on who is worse off, a renter or owner.

    We rent, we'd like to own, and I was asking for people to share their experience if they came up with a down payment.

    Please don't argue and get the thread shut down. No one said anyone had to buy or rent. Its a personal choice. What works for one person could be completely wrong for the next.
    This thread is a brilliant idea.

    We all struggle month to month with personal finances and sharing ideas is perfect.
  • CityMouseCityMouse Posts: 1,010
    fanch75 wrote:
    And truthfully, if you can't save up $17,500, you probably don't need to be buying a house that costs $350k. How do you expect to make the monthly payments?

    my friend just bought a 1 br condo, maybe 600 sq feet in somerville, MA, not even very close to the T. it cost $350,000 and that was one of the cheapest places she could find. that's how much condos cost in this area.
  • fanch75fanch75 Posts: 3,734
    CityMouse wrote:
    my friend just bought a 1 br condo, maybe 600 sq feet in somerville, MA, not even very close to the T. it cost $350,000 and that was one of the cheapest places she could find. that's how much condos cost in this area.

    I guess it's time to decide if it's worth it to live in the area. Apparently it is! I hear Toronto is awesome to live in. I make a good living and those prices nearly give me a heart attack.
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  • MrMerkinballMrMerkinball Posts: 1,978
    fanch75 wrote:
    Good Lord. To hell with that. Why not move out a bit and commute into the city or find a job in the suburbs? Those prices are insane. Only speculation can drive up prices that high, it makes no sense. Is there a housing bubble in Toronto?

    $500k here would build a very, VERY nice house!
    It is starting to slow down, but it is not a bubble.

    Toronto has 15% of Canada's entire Population, so naturally it is crowded. Houses in the city are in high demand and are WELL over $500K.

    My House is 45 minutes out of the city and it's current market value is $485,000. As Gas goes up, though, value in the subburbs goes down.
  • chromiamchromiam Posts: 4,114
    fanch75 wrote:
    I guess it's time to decide if it's worth it to live in the area. Apparently it is! I hear Toronto is awesome to live in. I make a good living and those prices nearly give me a heart attack.

    same here, same here.... Toronto was a great city but I don't think I'd pay that much to live there...
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  • Inhiding230Inhiding230 Posts: 362
    This thread is so making me appreciate living in Nashville TN!!

    We own a house with about a half acre fenced yard (backing to woods), in a very nice neighborhood, very close to the interstate, and about 10 minutes west of downtown Nashville. It's 1700 sq ft, 3 bedrooms, 2.5 baths and perfect for our little family - it cost us $182k 2 years ago :D
  • CityMouseCityMouse Posts: 1,010
    fanch75 wrote:
    I guess it's time to decide if it's worth it to live in the area. Apparently it is! I hear Toronto is awesome to live in. I make a good living and those prices nearly give me a heart attack.

    Well my screen name says it all. I hate suburbs with a passion, and I hope I never have a job that requires driving in a car. I value living in an a good urban area much more highly than I value the inside of my living quarters. I love having a neighborhood square nearby where I can go sit on a nice night and be out with the rest of my community. I'd much rather to pay to "rent that" than own a house.
  • CityMouseCityMouse Posts: 1,010
    seren327 wrote:
    This thread is so making me appreciate living in Nashville TN!!

    We own a house with about a half acre fenced yard (backing to woods), in a very nice neighborhood, very close to the interstate, and about 10 minutes west of downtown Nashville. It's 1700 sq ft, 3 bedrooms, 2.5 baths and perfect for our little family - it cost us $182k 2 years ago :D

    living close to the interstate is a good thing?
  • AmentsChickAmentsChick Posts: 6,969
    There's not a chance in hell I'll be able to afford a house. Some friends of mine recently purchased a house...3 bed/1 bath... $700,000...San Diego SUUUUUUUUUUUUUUUUUUUUUCKS.
    This is the greatest band in the world -- Ben Harper

  • nick1977nick1977 Posts: 327
    fanch75 wrote:
    I guess it's time to decide if it's worth it to live in the area. Apparently it is! I hear Toronto is awesome to live in. I make a good living and those prices nearly give me a heart attack.

    No kidding! I bought a 3 bedroom, 2 bath, 6 year old home on a 1/3 acre lot for $125,000.00. I know I am lucky to live in a place where affordable housing is abundant. But holy hell! Those prices are insane!
  • Inhiding230Inhiding230 Posts: 362
    CityMouse wrote:
    living close to the interstate is a good thing?

    Not so close that we can hear it - it's about 2 miles :P But yes because I commute to the other side of town every day, so getting on the interstate easily is important.
  • nick1977nick1977 Posts: 327
    There's not a chance in hell I'll be able to afford a house. Some friends of mine recently purchased a house...3 bed/1 bath... $700,000...San Diego SUUUUUUUUUUUUUUUUUUUUUCKS.


    Wow. $700,000 would buy one hell of a house here.
  • decides2dreamdecides2dream Posts: 14,977
    fanch75 wrote:
    Good Lord. To hell with that. Why not move out a bit and commute into the city or find a job in the suburbs? Those prices are insane. Only speculation can drive up prices that high, it makes no sense. Is there a housing bubble in Toronto?

    $500k here would build a very, VERY nice house!



    as the real estate adage goes:
    location
    location
    location

    in todays housing climate, even with the declining prices....500K is pretty average where i am, and up! and i am in the suburbs, but still close to commute into manhattan. living near major metropolitan areas always is pricey. always trade-offs for how/where you want to live your life.
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  • AmentsChickAmentsChick Posts: 6,969
    nick1977 wrote:
    Wow. $700,000 would buy one hell of a house here.

    I KNOW!!! Like I said, I wouldn't mind moving to AR.
    This is the greatest band in the world -- Ben Harper

  • panthergirlpanthergirl Posts: 469
    my husband and i were 23 when we got married and lived in an apartment for 2.5 years, then bought a house (pre-construction; zero-lot-line; 1800 square ft; around 100K... ok, it was 20 years ago)
    when we finally moved in, I was 4 months preggers.
    he worked a regular job then on weekends bartended at a really busy bar and made a bunch of cash. i would take the money, put it right in the bank and we saved enough to put 20 percent down...

    people would comment, oh, you're lucky your parents gave you the money...
    but we saved hard for that house.

    we've been in a different house now for 11 years and I have NO idea how regular people can afford to buy a first home.
    we would have a really hard time now if we had to....
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  • nick1977nick1977 Posts: 327
    I KNOW!!! Like I said, I wouldn't mind moving to AR.

    Move on over! We need more PJ fans hear so that they will visit Arkansas again.
  • CityMouseCityMouse Posts: 1,010
    nick1977 wrote:
    No kidding! I bought a 3 bedroom, 2 bath, 6 year old home on a 1/3 acre lot for $125,000.00. I know I am lucky to live in a place where affordable housing is abundant. But holy hell! Those prices are insane!

    well you're "lucky" in the sense that having a cheap house is what's important to you. but as decidestodream said, it's a tradeoff. I couldn't live in most of these places where you could a buy a house for that cheap, I'd go nuts. So, as I said, I feel "lucky" to live where I do, even if I can't afford a house and my rent is $1650 for a 1.5 br. It's a trade off.
  • nick1977nick1977 Posts: 327
    CityMouse wrote:
    well you're "lucky" in the sense that having a cheap house is what's important to you. but as decidestodream said, it's a tradeoff. I couldn't live in most of these places where you could a buy a house for that cheap, I'd go nuts. So, as I said, I feel "lucky" to live where I do, even if I can't afford a house and my rent is $1650 for a 1.5 br. It's a trade off.

    You are right. I'd love to have some of the things a major metropolitan area has to offer. But, I like my small town of 60,000. I'm not too far away from some small metropolitan areas (Little Rock and Memphis). I love living 10 minutes away from work so that I can go home on my lunch break. I love the slower paced life. I do sacrifice some of the "luxuries" of larger areas.

    Honestly, having a cheap house is not what it is important, it was just a benefit of my town. What is important to me is having a good job working with people who treat me like family, having time to spend with my family, and making enough money after expenses so that we can save for a good retirement, take good vacations, etc.

    You do have to look at what is important to you.
  • JOEJOEJOEJOEJOEJOE Posts: 10,618
    In the age of telecommuting, I am surprised more people don't move to smaller cities. Big city wages and small-town cost of living is a great combo!
  • AmentsChickAmentsChick Posts: 6,969
    nick1977 wrote:
    You are right. I'd love to have some of the things a major metropolitan area has to offer. But, I like my small town of 60,000. I'm not too far away from some small metropolitan areas (Little Rock and Memphis). I love living 10 minutes away from work so that I can go home on my lunch break. I love the slower paced life. I do sacrifice some of the "luxuries" of larger areas.

    Honestly, having a cheap house is not what it is important, it was just a benefit of my town. What is important to me is having a good job working with people who treat me like family, having time to spend with my family, and making enough money after expenses so that we can save for a good retirement, take good vacations, etc.

    You do have to look at what is important to you.

    Yeah, and you just never know who lived in the house before you! ;)
    This is the greatest band in the world -- Ben Harper

  • nfanelnfanel Posts: 2,558
    JOEJOEJOE wrote:
    In the age of telecommuting, I am surprised more people don't move to smaller cities. Big city wages and small-town cost of living is a great combo!
    i work from home 1-2 days/week and on those days i don't have to pay the philly wage tax...it's like a 5% raise for staying in my pj's!
  • know1know1 Posts: 6,794
    I saved it up in cash. You just have to be disciplined, patient and live within your means. I bought a small, affordable townhome with a 10% downpayment initially and lived their until appreciation and equity allowed me to put about 25% down on a larger home. I still have the smallest, most modest home of any of my coworkers and I make more than almost all of them.
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  • CityMouseCityMouse Posts: 1,010
    know1 wrote:
    I still have the smallest, most modest home of any of my coworkers and I make more than almost all of them.

    hence the mortgage crisis.
  • OK, you guys are going to hate me: My mother in law sold my then fiance and me her townhouse in the City of Falls Church, VA at a $60K discount in 2004 and we used the "gift of equity" as our downpayment (we had to cover the closing costs out of our IRAs/401Ks). Between 2004 and 2006 that house appreciated an additional $100K in value. We sold that house and made enough to pay off all of our bad debt (all of credit cards wiped out), put 20 percent down on a $500K townhouse in Fairfax, and fully furnish said new house. I also got a brand new stereo system out of the deal and my wife got a remodeled kitchen (granite, stainless, etc.), plus some cushion in savings.

    Not a day goes by where I take any of this for granted, and I commend those of you who had to do it the hard way.
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  • PoncierPoncier Posts: 17,163
    Not necessarily.. unless you plan on keeping the building for a long time or fixing it up, experts say you are better off renting and investing your down payment instead..
    Which is why I said "in the long run" in another post...short term flipping can be risky.
    This weekend we rock Portland
  • PoncierPoncier Posts: 17,163
    CityMouse wrote:
    ...BUT only if I sold the house.
    If you buy a house and then live in it forever...then it's not a good financial move.
    Lets say you live in it for 50 years and have a 30 year mortgage, the last 20 are mortgage free, but rent is forever.

    Like say, I for some reason had a kid...if, like you say, I'd want to use the equity on my house to pay for her college, I'd have to sell the house...and then I'd have to buy a new one to live in...so...how am I paying for college?
    Home
    Equity
    Loan
    or more reasonably...I retire, so I sell my house to get the equity out...and then I'm back to renting!
    Back to renting, with six figures in cash you wouldn't otherwise have.
    This weekend we rock Portland
  • PoncierPoncier Posts: 17,163
    If you buy...buy a house with a/c. ;):p
    Yes , buy a house with Ament's/Chick.
    This weekend we rock Portland
  • __ Posts: 6,651
    I'm interesting in knowing how you came up with a large sum of money for your home down payment. That is, if you own a home, and put down a down payment.. haha.

    My husband and I have been discussing how things have changed in society, and how people used to get a lot of help from their parents, and get big signing bonuses and such.

    We're at a loss as to how to come up with 40-50k. Its not like a year of saving would get us there, or even 10 years.. haha.

    How did you do it?

    I always felt like there was no way I could afford to buy my own place. Everyone I know who owns their home has a second income (spouse, roommate, etc.) and many of them are able to make overtime pay, bonuses, etc. Without these luxuries, there's no way I could afford to save up a down payment. But push came to shove (my apartment complex was turned in to condos & we renters were given the boot) and I found myself down at the credit union just checking on the possibilities.

    Turns out I was able to buy a place with no down payment, very little in closing costs (I used my tax refund), and no PMI. I don't remember all the details off the top of my head, but it had to do with me being a first time home-buyer and having good credit. I was able to get a second loan (at a pretty good interest rate) to cover the down payment. I could only afford the mortgage of a townhouse (which is plenty big for me), but I'm just glad I'm now able to put my money toward equity in my own home instead of throwing it away in rent. I wish I had taken my ass down to the credit union a few years earlier.

    If I were you, I'd just go down to your bank (or, preferably, credit union) and see what programs they have to offer. I still can't believe that after all those years of lamenting the fact that I couldn't save much of a down payment, it turns out I didn't need one! (Maybe you've already done this, but I haven't read the whole thread.)
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