how do you come up with a down payment?

AmentsChick

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.

nick1977

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!

Inhiding230

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.

nick1977

AmentsChick wrote:

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.

decides2dream

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.

AmentsChick

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.

panthergirl

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....

nick1977

AmentsChick wrote:

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.

CityMouse

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.

nick1977

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.

JOEJOEJOE

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!

AmentsChick

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!

nfanel

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!

know1

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.

CityMouse

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.

Smarter_Than_U

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.

Poncier

LikeAnOcean wrote:

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.

Poncier

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.

Poncier

AmentsChick wrote:

If you buy...buy a house with a/c.

Yes , buy a house with Ament's/Chick.

_

GraySaturday wrote:

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.)