Hellobee Boards

I'm closing thursday on my house with mortgage at 5% down, which lots of banks will do if you have decent credit. Check out Wells Fargo. The down payment plus closing costs came out to about 25k, which we had in savings. We also took out a small loan from our 401k, just to not totally drain our emergency savings, so I would suggest looking into that. You pay back the money (plus interest) to your 401k, so you're not damaging your retirement funds significantly.

Also, check out the Home Ready program. It's a new mortgage program designed to be a low down payment option. If you're at or below the median income for your area, you can use it to buy most houses. But even if you're above the median, you can still use it with some houses. It's a great program.

We bought our house before we had a baby, post-kids I feel so broke because of daycare, diapers, new shoes and clothes every season, new toys, paying for her flights, etc. Kids are expensive!

We were working in the bay area at high paying jobs and living in an apartment before our kids, and were able to save monthly and save annual bonuses.

We only put 5% down and paid the closing fees, which was about $30K total.

I think the biggest factor for us was we don't have student loans. If we had been paying back loans all this time saving would have been so much harder. And we have been lucky that we haven't had unexpected major expenses like a preemie. We have also always lived below Our means, and gotten lucky in things like finding a great apartment for cheap. And Dh earns a good salary. Even still we can't afford the kind of house we want in the neighborhood we want but we were able to buy our condo when the opportunity presented itself.

When we bought our first home, we were only able to put 5% down. We bought the roughest looking house on a great street. We were able to fix it up and receive government grants (Ontario, Canada) that helped pay for our renos. We held on to house for 5 years and then sold it for a great profit. That was how we were able to put 20% down on our forever home. We were lucky to do that before we had any kids though.

We put about 10% down because we lived really cheap for a while after college with no kids and decent jobs. We kept about another 5% cash for house appliances and things we needed and used our wedding cash to install new hardwood floors after we got married. Oh and we bought when there was the first time home buyer $8k tax credit so that helped a ton. Also why we jumped at buying with just 10% and paid PMI

We had a FHA loan for first our house and really scraped up everything we had at the time to pay that!

Honestly, we just put off buying a home for a very long time. I don't see rent as throwing money away and I never really had any desire to be a home owner.

Buying definitely has advantages over renting. But I think, sometimes, people just assume they're supposed to buy a house and never think about the benefits of renting. It's totally dependent on your individual situation and local renting/buying market. But your total costs renting (rent plus the loss of tax credit for a mortgage) are significantly lower than your total costs owning (mortgage, PMI, taxes, repairs, which are often underestimated) then you might be better off renting and investing the savings. This is especially true if there's any chance you would be moving in the next 5-10 years.

I'm not saying that you would be better of renting, but there are situations out there where it is more fiscally prudent to rent. Sometimes I think home ownership can be a very emotional thing that people feel like they're "supposed" to do to be adults and American dream and all that. And I think that's not the best reason to buy. If owning is better for you, go for it. But there's nothing wrong with renting forever.

I bought a studio a few years after I started working. It was mostly thanks to my parents - they paid most of my college tuition, then I lived with them to put aside what I would have spent on rent.

But I live in NYC and we're completely priced out of the market, even though we're two working adults with no major debt. It took us a few years to save up enough to consider buying anything bigger, but even when we sell the studio, money that would buy a small home in most other places will only get us a tiny one bedroom in a bad neighborhood. Unless we win the lottery, we're planning to rent for the next several years until we figure out a way to get out of NYC.

@JenGirl: Definitely agree that many people overlook whether it actually is financially beneficial to them because of emotions and feeling like it is what you are supposed to do (especially once you have a kid). Though your happiness is important too, even if it costs more to own so you have to consider all the factors.

To answer OP's question, this is why so many people buy starter houses. You buy a starter house and don't put 20% down and hope the market will go up and that you will make enough money when you sell to put down 20% at the new place. That's what my husband and I are doing! Plus we lived with my parents for 8 months to save up money. It would have probably taken two more years to afford to buy a house if we hadn't done that.

I also empathize feeling like it's really hard to save money bc even living rent free for that long we should have saved more money than we did (though we did pay off some CC debt too). What helps me save more is to have money automatically transferred to savings as I get paid; if the money is in my account I have a tendency to spend it. If it's in savings it seems as if it is already spent. I have also been working on developing a frugal mindset (reading frugal blogs has helped me with that) which has really cut down on unnecessary expenses (restaurants, clothing, convenience foods).

My husband was in a serious car wreck and broke his back. We used the money from the settlement of his claim for the 15% downpayment on our first condo (it was Boston, so expensive, and 15% required). We had a little profit when we sold our condo and we saved that for our next home, which we put down 20% on - we wouldn't have been able to do this without profits from first condo and away everything extra over the course of a year.

I lived pretty much like a student for the first 3-4 years I was working. I saved a lot of money by having roommates. My one big splurge was a new car. I also didn't have student loans so I could devote a lot of money towards saving for a down payment.

We got married in our mid 30s and had lots of time living in small apartments to save up money. I got a small grant for my first condo, from a government program for teachers. It was a good investment that when sold, helped me roll that profit into our next down payment together. DH had plenty of money saved because he was well paid and single and frugal.

Eta: there is no way we could save enough now with kids and daycare costs.

We had help buying our house from DH parents. But when we first started looking, we had saved 10,000 and looked at the lowest end of the market. We knew we couldn't afford much but we also knew we'd be throwing away money to rent anything bigger than our one bedroom apartment. We didn't know that DH parents would help us (and probably would have needed to wait another year). But that 10,000 we saved in a year and a half. We lived on DH income and saved mine (which was only PT self employed and we had a kid). We put very little into retirement, resurrect cars from the dead, and live with no frills.

Now that we own a house, the constant costs are still scaring us a little! Even just the first year set up of tools and lawn stuff is making it really hard to build up our savings again. I'm glad that we learned to live really frugally because I'm not sure how we would survive owning a house otherwise.

@Eko: we live north of Boston

DH used to work in an industry where he received large annual bonuses, so we used those to put down a large down payment on our home.

@bushelandapeck: nice! Where?! We are currently renting in Somerville and are buying a home in Tewksbury.

@Eko: You're really close to us, we're in Tyngsboro. Or, you will be. And half the people I work with live in Somerville.

@Eko: No, we work in Burlington. Commuting to downtown takes 1.5-2 hours, which is just way too much for us.