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Post by LavenderLayoutLady on May 31, 2015 11:08:20 GMT
How long did it take you to save for a home downpayment?
And how much did you save total?
If you feel comfortable answering those questions, I'd appreciate the perspective. I'm feeling very discouraged right now and would like to hear from those who accomplished this goal.
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Post by anxiousmom on May 31, 2015 11:28:21 GMT
I think it is different now than it was when we (my ex and I) bought our house 20 years ago. The rules were looser, the downpayment requirements were a lot fuzzier, and banks were a lot more lenient.
We bought this house after living in an apartment for a while and we decided that we didn't want to pay more than that for a mortgage payment. After searching around, we found this house-the tiny house in a great neighborhood for a real small price. We were able to get an FHA loan which made it even easier. In fact, I think the whole things was almost too easy-we just blundered our way through it and came out on the other side with a house. I suspect my ex understood it a lot more than he let on.
The down payment was low because a) FHA didn't require as much of a downpayment and b) the housing market was SO different-and the house was less than $75K at the time. I don't even remember specifically saving, but using my ex's bonus that year.
But again, the market was SO different than it is now. It would have been a very different experience if we were starting the process now.
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AnotherPea
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Jan 4, 2015 1:47:52 GMT
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Post by AnotherPea on May 31, 2015 11:38:18 GMT
My story isn't typical, at least in my circle of friends. We put down $20,000, after saving for four months.
I had just graduated college. It took me a year to get that college degree - before that I was a SAHM for two years. Before THAT I was in college earning a different degree. I had several part-time jobs while earning the first one, so I would be able to afford staying at home when our first baby was born. We saved up a few thousand dollars to have as a safety net. But dh worked weekends and I did odd things here and there to bring in money. His base salary was $22K, IIRC. We ended up using part of our safety net to pay for dd's daycare while I was in college a bit later. Even though she only attended 8-10 hours a week we paid for full-time care since my schedule was erratic. For years our budget was built around dh's meager salary. So when I got my job, which paid a pretty penny for our parts, everything I made was able to go into the bank. Except for buying a few work outfits and paying for extra gas in the car, every cent I made went into our savings account. Dh probably contributed 2K of that from his paycheck. We did not have to pay any closing costs and we let the previous owners rent back from us so we had extra money for moving-in/new house expenses by the time we took possession.
I should also add that this was about 15 years ago and you could buy a decent, but small, starter home for 100K or less at the time. We went with a REALLY small house so if we ever decided to have another child and want one of us to be at home full-time again, the option would be there. Which we did about two years later. Buying small allowed us to have one parent home for almost a full decade.
I would not be able to do that on my current salary or with my current responsibilities.
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Post by ScrapsontheRocks on May 31, 2015 11:45:40 GMT
Totally different country and a totally different market / financial environment, but I want to give a few words of encouragement. 15 years ago my husband & I decided it was time to stop working all over the world (mainly him) and commit to SA. We were in the middle of saving to quit our jobs and start our own company. Our objective was to have a year's money put away before we quit. I had a nice but small townhouse. He had investments overseas which were then "untouchable".
We fell in love with the place we are in now- terrible timing because we knew our savings would not cover the down payment, a year's expenses while we started up, and the dreaded transfer duty here, which is charged on a sliding scale according to the value of the property. We leapt. We struggled like billy-o sometimes. When our clients paid late it could get rough. Don't give up. Owning a place you love is worth it. All good thoughts that your goal is not too far away.
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Post by mikklynn on May 31, 2015 12:55:55 GMT
We bought our first home 35 years ago with a VA loan, so zero down. BUT, we bought a teeny, tiny house that didn't even have a garage.
We put a lot of sweat equity and all our extra cash into fixing it up. We added a garage, A/C, a fence, landscaping, etc.
Then, when we sold it to buy the house that we wanted to be our forever home, we had enough equity for a sizable downpayment.
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akathy
What's For Dinner?
Still peaing from Podunk!
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Jun 25, 2014 22:56:55 GMT
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Post by akathy on May 31, 2015 13:05:03 GMT
We lucked out because the sellers were getting divorced and needed to get rid of the house they'd lived in for less than a year. All they asked was for $1,000.00 down and to take over their mortgage which was at a good %. It worked for us. We stayed a little over a year and in that short time were able to gain enough equity that when we sold that house we had enough for the next down payment. (This was about 30 years ago however.)
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rickmer
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Jul 1, 2014 20:20:18 GMT
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Post by rickmer on May 31, 2015 13:33:54 GMT
we bought our first home from the bank. couple got divorced and husband stopped paying because "she wasn't getting anything". that was in 1994 and dh has $5000 in a savings account.
we started looking for our second house in 2002 and dh was ready to put down $5000, our realtor said minimum of $10,000 so that took us almost a year to come up with as we already had $5000 saved.
i work in real estate and average deposit for an average home in toronto is 25-30k now. i routinely see $50k deposits. i don't know how we could buy a home now, if we weren't already in the market.
the point is, it will just continue to go up so be the smart one and persevere. you will never regret it.
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Post by genny on May 31, 2015 13:34:24 GMT
We bought our first house 18 years ago and things were MUCH different than now. We only had to have $5000 down for our starter home and lending restrictions were much more lax. We had next to nothing, but it was a great deal on a great first house and a good area. Each of my parents gave us $2500 - which we paid back within a year or so - for our downpayment. We stayed in that house for 10 years and sold it just before the housing market fell apart. We made more on that house than I thought we could. We put all but $5k of what we made on the downpayment on our 'forever' home. We used that $5k to update all the appliances and make a few minor changes to the new house. The market crashed just a few months after we bought the new house in a premium sellers market. We walked into this house with a great deal of equity and just one year later we were upside down. 8 years later we are still upside down I'm afraid based on the sales prices that have happened in the neighborhood the last 2 years. I will also tell you if we had to buy now we could not do it. DTI has changed, credit, and when business got bad during the recession we depleted our savings trying to stay afloat.
Slow and steady wins the race - try to not to get discouraged! I know it's hard. As we try to rebuild ANY savings for our golden years, we hit setback after setback. It does get frustrating! Good luck!
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gsquaredmom
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Jun 26, 2014 17:43:22 GMT
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Post by gsquaredmom on May 31, 2015 13:42:49 GMT
We saved for twenty years to try to get twenty percent. Never got there. My sister told me about FHA and we became homeowners seven years ago with 3 percent down.
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Post by moveablefeast on May 31, 2015 13:48:09 GMT
We hit setback after setback when we were young. We caught a small break when DH was laid off and given a very generous severance of six months' pay which we used for a down payment as he had another job lined up immediately. We put down 10% (the whole severance) and financed the rest with 10% in a HELOC which we paid off as quickly as possible. Then we refinanced the 80% into a HARP loan a while back and put us on track to pay the mortgage off in 15 years despite multiple setbacks since then including my parents' care. That severance package was the turning point for us with regard to home ownership. Without it we would not be in this house.
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Deleted
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Sept 28, 2024 23:13:35 GMT
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Post by Deleted on May 31, 2015 14:01:01 GMT
We did a rural housing loan where a down payment is not required and there is no PMI.
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Post by brina on May 31, 2015 14:01:24 GMT
We bought our first place about 2 years after we got married. We were both working, but we lived on dh's salary and banked mine. I was planning to attend grad school and we knew my salary would be going away. Just before I started school we bought a 3-flat not far from the university. We put 20% down and the rent from the other two units covered nearly 3/4 of our mortgage allowing us to live cheaply - our share was less than the rent we were paying before. I finished school and gave birth to our twins within a 3 month time period and we remained in that house for another 3 years. We sold after owning the building for 5 years and made enough to put about 30% down on our current house.
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Post by Merge on May 31, 2015 14:08:45 GMT
Our first home was FHA and very inexpensive - we only had to save about $2500 and it took us maybe six months. We were living in an apartment with no kids so it was easier to save back then.
For our two subsequent homes we've used the proceeds from the sale of one as a down payment on the other, and we lived in each home for 7-8 years, so I guess you could say that's how long it took for us to "save" the money.
I really feel for people trying to break into the real estate market now. Trying to save 20% on an entry-level salary would be challenging at best.
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Post by scrappychick on May 31, 2015 14:17:03 GMT
We are currently saving for a down payment ourselves, and I know how you feel. My goal is 20% of a fictitious $240,000 house. I started a part time job 2 months ago, and everything I make is going towards that goal. With my wages, tax refunds, and DH's yearly bonus, It will take us 2 years to save what we need. Three years if something happens along the way. It can be discouraging, especially when I see houses for sale that I would love to buy! You can do it!
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mallie
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Post by mallie on May 31, 2015 14:17:23 GMT
It took us almost a decade for our first house. We were young, poor, poorly paid, and I had student debt.
Subsequent houses did not take nearly as long because we had better paying jobs. That was the big difference -- getting to a point in our careers where we made actual money, as opposed to barely above poverty level wages. (And FTR, we both have master's degrees and work in professions. They were just poorly paid professions, hence why we have advised our kids to go into fields with real money in their paychecks.)
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Post by Crack-a-lackin on May 31, 2015 14:27:26 GMT
we bought our first home from the bank. couple got divorced and husband stopped paying because "she wasn't getting anything". that was in 1994 and dh has $5000 in a savings account. we started looking for our second house in 2002 and dh was ready to put down $5000, our realtor said minimum of $10,000 so that took us almost a year to come up with as we already had $5000 saved. i work in real estate and average deposit for an average home in toronto is 25-30k now. i routinely see $50k deposits. i don't know how we could buy a home now, if we weren't already in the market. the point is, it will just continue to go up so be the smart one and persevere. you will never regret it. Curious, in the US it's generally a percentage of the home cost, not a flat 25-30k, is that not the same in Toronto? So here a 20% down payment, which is ideal to avoid mortgage insurance, would very greatly depending on the price of your house.
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Deleted
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Sept 28, 2024 23:13:35 GMT
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Post by Deleted on May 31, 2015 14:39:25 GMT
Several years. I saved all of my tip money from waitressing, and put leftover change and small bills and gift money away in a shoebox for many years. As soon as DH got his first real job when he was done school, we bought the house we're living in now (that was 4 years ago). I honestly never thought we'd be able to afford to buy a house, as we watched housing prices skyrocket. We ended up having to move to another region in order to buy a house we could afford -- but our mortgage here is a fraction of what we'd be paying in rent or mortgage if we lived where we used to. Unfortunately we had to sacrifice in some areas so we could buy a house, but we needed a bigger house and this one is the one we could afford!
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psiluvu
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Jun 25, 2014 22:52:26 GMT
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Post by psiluvu on May 31, 2015 15:00:13 GMT
About 15 months. We paid for our wedding and then started saving for our house. This was 18 years ago and we had 10% down on a $128,000 house. Also at the time we were only paying $300.00/month in rent as were we were living in one of DH's boss's properties and it was a perk of the job. Our house has more than tripled in value and I don't know how young people starting out do it today.
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Post by tuva42 on May 31, 2015 15:07:04 GMT
We bought our first house 24 years ago, about a year and a half after we got married. We knew when we got married that we wanted kids eventually, and that when we did have them, I would be a SAHM. So from the moment we married, we lived on DH's salary alone. We saved every penny of my salary. We already had some savings, but saving my salary built it up fast. We were able to put $20,000 down on our first house. After that we continued to live on his salary and saved mine, so it was easier when I quit when our first child was born 2 years after that.
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Post by Woobster on May 31, 2015 15:07:37 GMT
We bought our house as a short sale almost 6 years ago and put 5% down. It took us about three months and was around $9,000. We were lucky enough to benefit from someone else's misfortune in the house market, and ended up in a great house at a fantastic price.
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Deleted
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Post by Deleted on May 31, 2015 15:14:16 GMT
We didn't, kind of. We had long-term savings but hadn't been planning to buy a house. Then my husband got laid off, we decided to move to a new city, and we bought a house, all in the span of two months. We used my annual bonus from my job for the down payment, and only had to pull about $3000 from our existing savings for closing costs. We bought near the bottom of the market in 2009 and got a great deal.
If we'd saved at our normal rate, it would have taken about two years to save the down payment.
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Post by myshelly on May 31, 2015 15:24:45 GMT
My best friend is trying to buy a house right now.
She got approved for a mortgage with a down payment of 1/2 of 1%.
So many people say the rules are stricter now, but my personal experience has been not really.
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Post by ntsf on May 31, 2015 15:33:12 GMT
my dh bought some land right out of college with his mom. we bought our house about 6 months before we were married. we sold the property for about 4 times what dh paid for it...and with a bridge loan..that paid for our down payment. we put about 15% down. but nowdays, the junkiest house in the neighborhood is $800,000...so we wouldn't be able to buy today.
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Post by leannec on May 31, 2015 15:44:52 GMT
We were very fortunate in that FIL and his business partner put the downpayment on our first house ... they were also on the title which was fine with us because we were young and poor
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Post by chaosisapony on May 31, 2015 15:51:45 GMT
It took me two years to save $4500. Turned out I was able to get a mortgage with no down payment but it took every cent of that $4500 to pay the closing costs.
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scrapaddie
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Jul 8, 2014 20:17:31 GMT
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Post by scrapaddie on May 31, 2015 16:06:13 GMT
We got a home improvement loan for our down payment. Banker was a friend and it was lpnnnng ago. We felt blessed to get a loan at 11 3/4 %!!
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Post by rebelyelle on May 31, 2015 16:12:50 GMT
I so, so feel your pain. DH and I have been saving for a couple of years. However, come July we will both be self-employed and the money we've have saved to date will instead be funneled into an emergency fund, given that self-employment is a bit riskier and we want to be prepared. On the plus side, we will have paid off my biggest student loan and his student loans by summer, and be done with daycare payments around the same time, so all of those bills will go into saving for a house. With PMI being so expensive, we don't want to be at less than 10%, and our hope is that we won't have to pay closing costs. We also live in an area with incredibly expensive housing. We got a steal on the house we are renting - it's in an amazing neighborhood with terrific schools. But, we could never afford to buy here - the cheapest homes is this area for 1,200sf 3bed/1 bath start at $650k, and even those are few and far between. It's nuts. We are hoping that we'll have figured out where we want to move to in the next few years where we can buy a more reasonably priced home with decent schools. Barring no major catastrophes, it will probably take us another 3 years to save 10% in cash. We could probably make it work in 1-2 years, but I don't want to pull from our retirement given that we are self-employed, and therefore have no company "match". I want to make sure that is protected as much as possible.
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kate
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Post by kate on May 31, 2015 19:28:19 GMT
We saved hard for 2 years. Before we married, we lived in a luxury building that was truly beyond our means (I was young, and I thought we "needed" that level of service). We then left the city for a year for DH's job, and when we came back, we moved into a dismal little tenement to save for a place of our own. It was a DUMP - turned out to be terribly mouse-infested, and there were two serious fires in the building in the two years we were there.
With our savings from those two years and some supplement from our parents, we were able to put 20% down.
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Post by cakediva on May 31, 2015 19:43:36 GMT
we bought our first home from the bank. couple got divorced and husband stopped paying because "she wasn't getting anything". that was in 1994 and dh has $5000 in a savings account. we started looking for our second house in 2002 and dh was ready to put down $5000, our realtor said minimum of $10,000 so that took us almost a year to come up with as we already had $5000 saved. i work in real estate and average deposit for an average home in toronto is 25-30k now. i routinely see $50k deposits. i don't know how we could buy a home now, if we weren't already in the market. the point is, it will just continue to go up so be the smart one and persevere. you will never regret it. Curious, in the US it's generally a percentage of the home cost, not a flat 25-30k, is that not the same in Toronto? So here a 20% down payment, which is ideal to avoid mortgage insurance, would very greatly depending on the price of your house. I'm in Ontario as well - and yes, it is a percentage - but what she's saying is the "average" deposit people put down. Although depending on the area of Toronto, 20% down would be WAY more than $25-30K. Even in the small town I live in (about an hour from Toronto) average home prices are $350-400,000, so you are looking at $70,000 minimum. If you don't mind paying the CMHC insurance fees, then you can buy with as little as 10% down.
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Post by smokeynspike on Jun 1, 2015 1:29:47 GMT
We have bought two properties, and put zero down payment on both. But this was back in the early 2000s before requirements on mortgages got really strict. We also have never bought a property that cost too much more than 100K.
Melissa
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