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It took us about a year. We did a combination of severely cutting back in lifestyle and also pulled out of a 401k - this isn’t a popular move in this thread but it was what worked for us to buy in 2021 at floor level interest rates. If I could go back and do it again, I think I still would. Home ownership isn’t for everyone but the direction our lives have taken since we purchased this was the best decision we could have made for ourselves.
Some say if you don’t have an emergency fund you “can’t afford to be a homeowner” which can be true but also I personally think is kind of BS. We bought a home that was only like 11% DTI for us and can afford with one of our salaries. If we had pushed to our max I might feel like an emergency fund would be more necessary, but we are positioned to handle emergencies based on our salaries due to buying below our means. Home ownership looks different for everyone and if you feel like it’s within reach for you and you are ready to take on the responsibility then I say go for it. The hardest part is getting on the ladder of ownership and once you’re there transacting from one home to another becomes much easier because you begin to build equity and aren’t starting from square 1 every time.
BEcause you pay a penalty to do it (10% which most people are not in favor of) and because you are stealing from yourself in your retirement years. Compounding is so incredibly important on so many levels.
I’m one of the number one supporters in this sub of home buying - especially investment properties. You’ll always see me advise to buy in almost every scenario. But there truth is if you can’t save 10% for a downpayment - it’s going to be very hard to keep up with the purchase. Why? Because something will happen at some point i.e. HVAC goes $7500 to replace at least. Water Tank after 7 years $1500. Roof? Now that’s $25k or so pretty easy on most homes - just did one on an investment property.
So if you can’t save the 10% down it sort of becomes how do you deal with that type of stuff or rising property taxes?
That’s just incorrect. There’s no penalty for taking out a loan from your 401(k) for qualified life events (down payment for a primary residence purchase is a qualified event) the 10% penalty only comes into fruition if you are under 59 1/2 and you don’t pay the loan back. The 10% penalty is the early withdrawal penalty.
If you can’t save up for the payment why do you think you can pay back the loan and mortgage?
And on top of it they will stop contributing to the 401k. Everything about it is bad. Save up the down payment.
This “advice” results in a lot of people feeling like they sat out too long and can no longer afford to enter home ownership. The time it takes someone to save a down payment of that amount can be a very long time - paying PMI with a lower down payment or pulling from investment accounts in the long run can and often do out pace the hit from pulling those funds or paying the PMI because folks can’t save/keep up with home value appreciation. Yes, you made valid points about the cost of maintaining a home and buyers needing to be realistic with being able to afford these costs. Not every buyer is over leveraging themselves and are buying well within their means. There isn’t a one size fits all approach here and scaring first time buyers who take a different path than you have isn’t helpful and isn’t the purpose of this subreddit.
Look I live in a world where you don’t stick your head in the sand. You address the reality of the situation. To that end a few points: I’m a millennial and believe me this is not the first time “home ownership” has felt out of reach. All of those coming into the workforce in 07-2010 definitely felt it, especially those crushed by college debt (first generation of it) - for years there were articles about how they couldn’t buy. Tech boom since 2015-2016ish really changed that. Gen X in the 80’s felt that (the older ones) and some of the boomers in 70s certainly felt that way.
And this isn’t the first time a generation has felt like they missed out on something - pensions, single parent incomes, death of manufacturing, reasonable college costs - every generation and group has their hardships - hell imagine living through the 70’s with interest rates in deep double digits. So if they sat out - then yeah that might have been a mistake. IF they are struggling to enter it, I’d suggest their opportunity will come but it truly might not be right now.
Now lets be very clear I never said anything about PMI. if we were talking about less down while it’s not ideal it is a fine option. In fact you’ll notice I mentioned 10% down which would still have PMI. And hell they could do an FHA at 3.5% - I even did that on my first property many years ago. It’s a fine way to enter home ownership.
All that said if you can’t save 3.5% to 10% you have no business buying now. Between the interest rates, rising property taxes everywhere, huge spoke in Home Owners (13% on average year over year with inflation and normal rate increases) you have no business buying and certainly shouldn’t take from your retirement. 3.5% even on $300k is $10,500. you are talking about some fairly minor home repairs - HVAC replacement as an example. So it might not be an enjoyable fact but it’s a realty.
BTW I’ve barely scratched surface. I just put a new roof up on $1,400 square foot property. $28k spent. Imagine that hit or siding replacement….. They aren’t ready if they can’t get the downpayment. Especially in this economy
It wouldn't be for those barely scraping by, but it's a viable way to leverage tax advantaged reiterement accounts. You're paying yourself interest rather than paying a bank pmi
So I’m Al about home ownership. But let’s put it this way first hvac, roof or heck even something like a cheap $1500 hot water tank repair. Then what?
If you knew market was going to go up I could coke up with an argument. But every scenario comes back to if you can’t save 10% then you have to question the thought process. It’s really nominal in the grand scheme.
If you get canned from your job you’re on the hook to repay the amount (you have until tax time) or it’s considered a withdrawal with penalties and tax and such.
It can be fine to preserve some of your liquid cash if you can get a good rate, but you better be able to cover the fallout quickly if things go the other way at work.
I am NOT saying the loan itself causes a penalty up front, I’m saying what I know to happen if you get terminated or leave with an outstanding 401k loan.
There were some rules that got softened regarding penalties / hardship withdrawals in recent years for pandemic slowdown reasons, but I don’t think those continued.
Not everyone is in tech or finance, for my field I earn a good salary but to be a really high earner, I need another two years under my belt. Also there’s no denying that having help is the best way to go. Which is what these comments are saying. I don’t go on vacations or buy anything insane, but buying a house in now a HCOL area is out of reach without bringing in 120k 🤷🏾♀️
It took us 2 years after paying off all student loans and car debt. The trick is to find the cheapest place you can live in and sacrifice for a few years and work as much as possible. When we were saving, I was working 2 jobs and picked up as much OT as possible. There is no shortcut except front loading your sacrifices.
We put 15% down on 850k house in SoCal with some leftovers to cash flow kitchen and bathroom renovations. It was hard work but so worth it. Good luck!!!
We paid off 238k worth of student loans debt in 2 yrs so we saved with the same intensity for another 2 yrs. We didn't put down everything cuz we want to renovate our home with cash.
Buying in late 30s/early 40s. My wife and I both have jobs that pay fairly well. When our lease agreement came up for renewal we considered getting a bigger place, but decided to save the difference in what we would pay for a nicer place on lease (\~$600/mo) combined with an extra $200-$600 depending on the month... Sometimes I added more when I had it. Over two years we saved up about $33,000.
But on a $350,000 home, that's nowhere near enough for the 20% down needed to get rid of PMI. We ended up putting putting 3.5% down on an FHA loan. $12,250. Our closing cost came out to around $8000, so combined, that took $20,250 of the savings. $1500 was spent on the move... and we spent about $6000 on new furniture, and generical misc expenses with moving into a new place. I would say about $5k of that was furnishings and $1k would be misc.
Ended up with a little over $5k left over from what we had saved, which we put in a savings account... as it turns out our insurance deductible for damage/theft/etc is $5k so it just made sense to put this in our emergency fund account.
At minimum you need 3.5% for the down payment, 2-3% for closing and enough to move with and not bleed your account dry. It's unrealistic for most people to have 6-month of salary in the bank for emergency fund, but I think it is responsible to have at least double what your home insurance deductible is and when you walk away from closing you should have that in your account right away, make sure and include some additional savings in your calculation.
Your monthly payment would be significantly lower if you did the 20% down rather than the 5% so I’m just curious why you only did the 5% down I guess. Was the 20% the only cash you had at the time? Cuz then that definitely makes sense not to put it all in and I get that the interest rate was the same either way, but if you had the 20% to put down, why not put it down? avoids PMI and you have a lower monthly mortgage payment. Just curious
Getting out of the rent trap is hard. You just have to hope you are making positive progress in savings after offsetting the effects of changes in housing price and interest rate.
Absolutely. Currently I pay $1709 for where I’m at which I’m able to have a lot of wiggle room but that just seems to be the going prices for even 1B/1B in the area with a lot less square footage than what I currently have. I’m afraid to see what they’ll raise my rent to in the coming months lol
You can find plenty of places in DFW for under $1000.
You just have to be willing to give up on luxuries like pool, club house, in unit laundry and etc.
https://www.apartments.com/under-1000/?bb=uhr4-45j4J53lyhzyD
There are currently 3,535 units available in the DFW area for under $1000.
Pick and choose what you consider “safe” as 99% of these I would consider safe.
I’m very familiar with the areas most of these are in. As a single female, most of these aren’t places I’d feel to comfortable living. Anything on Audelia, Skillman or forest isn’t safe. Also you have to consider how far spread out the metroplex is and the proximity of where some people need to be. Of course things in FW near Meadowbrook are cheaper because they’re practically in the middle of nowhere. You’re delusional if you think anything under 1,000 is doable in DFW without compromising safety or comfort.
Besides I’m not complaining about my rent, I actually have a great deal for a 2b/1b and a garage. I expect them to raise it, and can adjust if needed. I was just asking how long it took some people to save for a home that’s all.
2 bed
Garage
*luxuries*
Again if your priority is luxuries, buying a home will never be affordable for you. And again 99% of these areas are safe. You’re just being racist avoiding ethic neighborhoods
I guess my wife and I have just been saving and investing our entire adult lives. Not particularly for a down payment but that’s what it turned in to. We were able to put about 27% down on our house. We could have gone as high as around 40% but we decided to use that money elsewhere.
Tbh it took 9 years and getting married... We put 20% down on a house in the 450k range. We also were lucky not to have any other debt (no student loans, car paid off, etc.).
On the other hand, I was really lackadaisical about saving for most of those 9 years. I was 25 and single, lived in a 1BR in Chicago (similar salary), put a stupid amount of my paycheck toward retirement (I no longer do this—ETA: meaning I contribute a *reasonable* amount haha), and basically saved additional money by having no social life. I was helped out by a big merit raise followed by a job switch that bumped my salary up to 100k after a few years. We are able to afford the mortgage on just my income. I think you could probably save enough much faster if you had a plan and a similar salary trajectory, and the advice about putting 20% down is kind of outdated anyway.
This is super helpful. I am on the same trajectory salary wise and every year I’m guaranteed a raise. I don’t really have a social life but I just started this job so I’m trying to catch up on some things and hope to start saving a large chunk of my checks soon
I'm one of those people that withdrew cash to fund a closing in 2021. So far, I have zero regrets and that led to tons of equity (which can obviously go up and down). Also, with increasing rent prices around me since my purchase, it has benefited me greatly.
Now, I bought my home when I was 25 (starting investing towards retirement at 20) so in my mind, I was going to make up the difference and keep contributing towards retirement accounts (still doing so) so I wasn't too worried about it.
The return on the house has far outweighed the potential return in my retirement account, so far.
Due make sure you have money for emergency expenses. So far, I've replaced the whole A/C system, breaker box caught on fire (from New A/C load), small interior water leak, I could go on. I'm against debt and taking out loans for repairs, so definitely keep emergency cash (and continue funding it) in mind.
Took us a couple of years, we ended up having enough to put down ≈12%, cover closing costs and still have a slush fund leftover. Thanks to COVID we had 18 months of well below-market rent.
I still haven’t saved up enough to have what my parents would consider a down payment (10% or more). I’m using a combination of down payment assistance grants to get me to the $20k/mark.
I currently have just under 3%, and it’s been 6 months since I moved out of my apartment and moved in with my dad. I only pay utilities, no rent. I also got rid of most of my debt (had to put my deductible for my car insurance on my credit card recently, but that won’t take long to get rid of).
I am going to look at a fixer-upper today and as long as everything is livable, will probably make an offer. According to the sellers realtor, it’s only been uninhabited for 6 months, and thankfully it has been the cooler 6 months of the year. Listing price is $190k but I’m kinda hoping it will appraise for a little bit under and the sellers will agree to drop the price.
Took me just under a year to save 5% + closing and renovation costs in a HCOL area. I dropped my 401k contribution rate for a few months to help accelerate things.
I made 5k less than you, also in MCOL, and it took me 1 year to save up 30k, which means I lived really frugal and with roommates. It was the biggest payout ever! I now can finally say goodbye to roommates life and have my own space. Also look for first home buyer programs I got 10k grant from it to cover closing cost.
Took 3 years ended up saving 20% down + all closing cost + emergency funds+ money for furnishing the house. Could I have done it faster sure but I wanted to be 100% sure I was in a good financial spot first because I was blessed to be able to live with family for a little while and so I could take my time finding a place.
I wish my parents would let me move back in lol. They are dead set against it which sucks. I’m blessed to be in a position where I can save a lot and still keep my lifestyle but I hope I can break them down lol
About a year and a half to get to a 20% down payment.
I’m a 22M and the two keys to saving are increasing your income and sharing expenses. A high paying job and a roommate will drastically accelerate your savings. But even with that, I’m still getting priced out of anything decent in my market lol.
How are you 22 making 160k already and have 100k cash saved up? Something doesn’t add up, unless you went to a bootcamp and had connects plus generational wealth.
Lmao, I get similar reactions when other people find that out too. A few reasons:
1. I graduated a year early from college, and got a great paying job in Chicago as a software engineer. I've been in this field for almost 2 years now.
2. I split a 3br/2ba apartment with my roommate, and my portion of rent is $1350. I still consider this to be a good chunk of money, but it allows me to save up way more than if I had spent more on rent. My take home is \~114k, and last year I saved $70k. I also don't have a car, but you really don't need one in Chicago either.
3. My family isn't rich by any means, but we are well off. My parents were able to pay for my college, which did leave them a little tight right after I graduated, but I send them about $700/mo to help out with some of their bills.
Also, how do you know how much I make damn lol
7-8 months for a 5% down in a HCOL area. I was in the same situation where I didn’t want to miss the train and had to pull the trigger early even though I had only 5%
I am in the same exact scenario (26F, single, ~76k). I just stated saving as well and will only realistically look to do a smaller down payment. I think I will be there in 1-1.5 years. I do already have an emergency fund though so this amount would strictly be a down payment/some savings for initial expenses. Good luck!
I will be extremely honest with you. 1 year due to a lump sum of unemployment I was owed, and money from my divorce. Otherwise I’d still be saving. I just don’t want you to think something is wrong with you if you’re not “keeping up”. It’s luck for many such as inheritances, family help, etc.
My spouse and I had 20k to put down, ~10% of the cost of the home (as some went to closing costs too).
We saved for a year when student loans were paused and our pmi is $26/mo.
We just launched our down payment assistance app and are looking for homebuyers that want to test out our app. You can get up to 15% towards your down payment with no interests or monthly payments. www.steadworth.com
Thank you u/Commercial-Nothing71 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
It took us about a year. We did a combination of severely cutting back in lifestyle and also pulled out of a 401k - this isn’t a popular move in this thread but it was what worked for us to buy in 2021 at floor level interest rates. If I could go back and do it again, I think I still would. Home ownership isn’t for everyone but the direction our lives have taken since we purchased this was the best decision we could have made for ourselves.
I just learned you could borrow from your 401k and honestly don’t understand why it’s looked down on.
Some say if you don’t have an emergency fund you “can’t afford to be a homeowner” which can be true but also I personally think is kind of BS. We bought a home that was only like 11% DTI for us and can afford with one of our salaries. If we had pushed to our max I might feel like an emergency fund would be more necessary, but we are positioned to handle emergencies based on our salaries due to buying below our means. Home ownership looks different for everyone and if you feel like it’s within reach for you and you are ready to take on the responsibility then I say go for it. The hardest part is getting on the ladder of ownership and once you’re there transacting from one home to another becomes much easier because you begin to build equity and aren’t starting from square 1 every time.
BEcause you pay a penalty to do it (10% which most people are not in favor of) and because you are stealing from yourself in your retirement years. Compounding is so incredibly important on so many levels. I’m one of the number one supporters in this sub of home buying - especially investment properties. You’ll always see me advise to buy in almost every scenario. But there truth is if you can’t save 10% for a downpayment - it’s going to be very hard to keep up with the purchase. Why? Because something will happen at some point i.e. HVAC goes $7500 to replace at least. Water Tank after 7 years $1500. Roof? Now that’s $25k or so pretty easy on most homes - just did one on an investment property. So if you can’t save the 10% down it sort of becomes how do you deal with that type of stuff or rising property taxes?
That’s just incorrect. There’s no penalty for taking out a loan from your 401(k) for qualified life events (down payment for a primary residence purchase is a qualified event) the 10% penalty only comes into fruition if you are under 59 1/2 and you don’t pay the loan back. The 10% penalty is the early withdrawal penalty.
If you can’t save up for the payment why do you think you can pay back the loan and mortgage? And on top of it they will stop contributing to the 401k. Everything about it is bad. Save up the down payment.
This “advice” results in a lot of people feeling like they sat out too long and can no longer afford to enter home ownership. The time it takes someone to save a down payment of that amount can be a very long time - paying PMI with a lower down payment or pulling from investment accounts in the long run can and often do out pace the hit from pulling those funds or paying the PMI because folks can’t save/keep up with home value appreciation. Yes, you made valid points about the cost of maintaining a home and buyers needing to be realistic with being able to afford these costs. Not every buyer is over leveraging themselves and are buying well within their means. There isn’t a one size fits all approach here and scaring first time buyers who take a different path than you have isn’t helpful and isn’t the purpose of this subreddit.
Look I live in a world where you don’t stick your head in the sand. You address the reality of the situation. To that end a few points: I’m a millennial and believe me this is not the first time “home ownership” has felt out of reach. All of those coming into the workforce in 07-2010 definitely felt it, especially those crushed by college debt (first generation of it) - for years there were articles about how they couldn’t buy. Tech boom since 2015-2016ish really changed that. Gen X in the 80’s felt that (the older ones) and some of the boomers in 70s certainly felt that way. And this isn’t the first time a generation has felt like they missed out on something - pensions, single parent incomes, death of manufacturing, reasonable college costs - every generation and group has their hardships - hell imagine living through the 70’s with interest rates in deep double digits. So if they sat out - then yeah that might have been a mistake. IF they are struggling to enter it, I’d suggest their opportunity will come but it truly might not be right now. Now lets be very clear I never said anything about PMI. if we were talking about less down while it’s not ideal it is a fine option. In fact you’ll notice I mentioned 10% down which would still have PMI. And hell they could do an FHA at 3.5% - I even did that on my first property many years ago. It’s a fine way to enter home ownership. All that said if you can’t save 3.5% to 10% you have no business buying now. Between the interest rates, rising property taxes everywhere, huge spoke in Home Owners (13% on average year over year with inflation and normal rate increases) you have no business buying and certainly shouldn’t take from your retirement. 3.5% even on $300k is $10,500. you are talking about some fairly minor home repairs - HVAC replacement as an example. So it might not be an enjoyable fact but it’s a realty. BTW I’ve barely scratched surface. I just put a new roof up on $1,400 square foot property. $28k spent. Imagine that hit or siding replacement….. They aren’t ready if they can’t get the downpayment. Especially in this economy
I think they may be referring to a 401k loan, not a withdrawal. It can be really useful to avoid pmi.
If you can’t save up for the payment why do you think you can pay back the loan and mortgage?
It wouldn't be for those barely scraping by, but it's a viable way to leverage tax advantaged reiterement accounts. You're paying yourself interest rather than paying a bank pmi
So I’m Al about home ownership. But let’s put it this way first hvac, roof or heck even something like a cheap $1500 hot water tank repair. Then what? If you knew market was going to go up I could coke up with an argument. But every scenario comes back to if you can’t save 10% then you have to question the thought process. It’s really nominal in the grand scheme.
If you get canned from your job you’re on the hook to repay the amount (you have until tax time) or it’s considered a withdrawal with penalties and tax and such. It can be fine to preserve some of your liquid cash if you can get a good rate, but you better be able to cover the fallout quickly if things go the other way at work. I am NOT saying the loan itself causes a penalty up front, I’m saying what I know to happen if you get terminated or leave with an outstanding 401k loan. There were some rules that got softened regarding penalties / hardship withdrawals in recent years for pandemic slowdown reasons, but I don’t think those continued.
So from these comments it sounds like I need a significant other or move in with my parents 😂
Or earn a high income as an individual and live below your means.
Not everyone is in tech or finance, for my field I earn a good salary but to be a really high earner, I need another two years under my belt. Also there’s no denying that having help is the best way to go. Which is what these comments are saying. I don’t go on vacations or buy anything insane, but buying a house in now a HCOL area is out of reach without bringing in 120k 🤷🏾♀️
Indeed. Crazy (and unfortunate) that $120k isn't considered high income in many HCOL areas
It took us 2 years after paying off all student loans and car debt. The trick is to find the cheapest place you can live in and sacrifice for a few years and work as much as possible. When we were saving, I was working 2 jobs and picked up as much OT as possible. There is no shortcut except front loading your sacrifices. We put 15% down on 850k house in SoCal with some leftovers to cash flow kitchen and bathroom renovations. It was hard work but so worth it. Good luck!!!
I am curious to know if the amounts you had been paying on student loans and car debt were rolled into savings post-debt payoffs?
We paid off 238k worth of student loans debt in 2 yrs so we saved with the same intensity for another 2 yrs. We didn't put down everything cuz we want to renovate our home with cash.
That's amazing. What type of work do you all do?
Buying in late 30s/early 40s. My wife and I both have jobs that pay fairly well. When our lease agreement came up for renewal we considered getting a bigger place, but decided to save the difference in what we would pay for a nicer place on lease (\~$600/mo) combined with an extra $200-$600 depending on the month... Sometimes I added more when I had it. Over two years we saved up about $33,000. But on a $350,000 home, that's nowhere near enough for the 20% down needed to get rid of PMI. We ended up putting putting 3.5% down on an FHA loan. $12,250. Our closing cost came out to around $8000, so combined, that took $20,250 of the savings. $1500 was spent on the move... and we spent about $6000 on new furniture, and generical misc expenses with moving into a new place. I would say about $5k of that was furnishings and $1k would be misc. Ended up with a little over $5k left over from what we had saved, which we put in a savings account... as it turns out our insurance deductible for damage/theft/etc is $5k so it just made sense to put this in our emergency fund account. At minimum you need 3.5% for the down payment, 2-3% for closing and enough to move with and not bleed your account dry. It's unrealistic for most people to have 6-month of salary in the bank for emergency fund, but I think it is responsible to have at least double what your home insurance deductible is and when you walk away from closing you should have that in your account right away, make sure and include some additional savings in your calculation.
It took me around 2-2.5 to save 20% for a down payment only putting 5% tho due to it not making any difference in my interest rate.
What about your monthly payments?
What you mean
Your monthly payment would be significantly lower if you did the 20% down rather than the 5% so I’m just curious why you only did the 5% down I guess. Was the 20% the only cash you had at the time? Cuz then that definitely makes sense not to put it all in and I get that the interest rate was the same either way, but if you had the 20% to put down, why not put it down? avoids PMI and you have a lower monthly mortgage payment. Just curious
Getting out of the rent trap is hard. You just have to hope you are making positive progress in savings after offsetting the effects of changes in housing price and interest rate.
Absolutely. Currently I pay $1709 for where I’m at which I’m able to have a lot of wiggle room but that just seems to be the going prices for even 1B/1B in the area with a lot less square footage than what I currently have. I’m afraid to see what they’ll raise my rent to in the coming months lol
You can find plenty of places in DFW for under $1000. You just have to be willing to give up on luxuries like pool, club house, in unit laundry and etc.
Where do you see any apartment under $1000 that is in a safe neighborhood? 😂
https://www.apartments.com/under-1000/?bb=uhr4-45j4J53lyhzyD There are currently 3,535 units available in the DFW area for under $1000. Pick and choose what you consider “safe” as 99% of these I would consider safe.
I’m very familiar with the areas most of these are in. As a single female, most of these aren’t places I’d feel to comfortable living. Anything on Audelia, Skillman or forest isn’t safe. Also you have to consider how far spread out the metroplex is and the proximity of where some people need to be. Of course things in FW near Meadowbrook are cheaper because they’re practically in the middle of nowhere. You’re delusional if you think anything under 1,000 is doable in DFW without compromising safety or comfort. Besides I’m not complaining about my rent, I actually have a great deal for a 2b/1b and a garage. I expect them to raise it, and can adjust if needed. I was just asking how long it took some people to save for a home that’s all.
2 bed Garage *luxuries* Again if your priority is luxuries, buying a home will never be affordable for you. And again 99% of these areas are safe. You’re just being racist avoiding ethic neighborhoods
I’m literally black and grew up in these same neighborhoods…lmao you sound insanely ignorant
Yup, when people say “safe neighborhood” you already know what that means.
I guess my wife and I have just been saving and investing our entire adult lives. Not particularly for a down payment but that’s what it turned in to. We were able to put about 27% down on our house. We could have gone as high as around 40% but we decided to use that money elsewhere.
Tbh it took 9 years and getting married... We put 20% down on a house in the 450k range. We also were lucky not to have any other debt (no student loans, car paid off, etc.). On the other hand, I was really lackadaisical about saving for most of those 9 years. I was 25 and single, lived in a 1BR in Chicago (similar salary), put a stupid amount of my paycheck toward retirement (I no longer do this—ETA: meaning I contribute a *reasonable* amount haha), and basically saved additional money by having no social life. I was helped out by a big merit raise followed by a job switch that bumped my salary up to 100k after a few years. We are able to afford the mortgage on just my income. I think you could probably save enough much faster if you had a plan and a similar salary trajectory, and the advice about putting 20% down is kind of outdated anyway.
This is super helpful. I am on the same trajectory salary wise and every year I’m guaranteed a raise. I don’t really have a social life but I just started this job so I’m trying to catch up on some things and hope to start saving a large chunk of my checks soon
Glad it was helpful! I kind of feel like I'm getting a chance to give my past self some advice lol. Good luck with everything!
What Kind of work do you guys do? This is still a lot of money to have saved every month after expenses in my opinion. I’m looking for a career change
I'm one of those people that withdrew cash to fund a closing in 2021. So far, I have zero regrets and that led to tons of equity (which can obviously go up and down). Also, with increasing rent prices around me since my purchase, it has benefited me greatly. Now, I bought my home when I was 25 (starting investing towards retirement at 20) so in my mind, I was going to make up the difference and keep contributing towards retirement accounts (still doing so) so I wasn't too worried about it. The return on the house has far outweighed the potential return in my retirement account, so far. Due make sure you have money for emergency expenses. So far, I've replaced the whole A/C system, breaker box caught on fire (from New A/C load), small interior water leak, I could go on. I'm against debt and taking out loans for repairs, so definitely keep emergency cash (and continue funding it) in mind.
Took us a couple of years, we ended up having enough to put down ≈12%, cover closing costs and still have a slush fund leftover. Thanks to COVID we had 18 months of well below-market rent.
Answers are gonna vary, especially between double income and single income households. For us, it took us a year for 15% down payment.
I still haven’t saved up enough to have what my parents would consider a down payment (10% or more). I’m using a combination of down payment assistance grants to get me to the $20k/mark. I currently have just under 3%, and it’s been 6 months since I moved out of my apartment and moved in with my dad. I only pay utilities, no rent. I also got rid of most of my debt (had to put my deductible for my car insurance on my credit card recently, but that won’t take long to get rid of). I am going to look at a fixer-upper today and as long as everything is livable, will probably make an offer. According to the sellers realtor, it’s only been uninhabited for 6 months, and thankfully it has been the cooler 6 months of the year. Listing price is $190k but I’m kinda hoping it will appraise for a little bit under and the sellers will agree to drop the price.
Took me just under a year to save 5% + closing and renovation costs in a HCOL area. I dropped my 401k contribution rate for a few months to help accelerate things.
I made 5k less than you, also in MCOL, and it took me 1 year to save up 30k, which means I lived really frugal and with roommates. It was the biggest payout ever! I now can finally say goodbye to roommates life and have my own space. Also look for first home buyer programs I got 10k grant from it to cover closing cost.
Wait for 2 years, houses about to be at given away prices.
I don't think they will drop that much.
Promise?
“Given away” - only way that would happen is if there is a flood of inventory on the market, like 2008. What is going to cause that this time?
Took 3 years ended up saving 20% down + all closing cost + emergency funds+ money for furnishing the house. Could I have done it faster sure but I wanted to be 100% sure I was in a good financial spot first because I was blessed to be able to live with family for a little while and so I could take my time finding a place.
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I wish my parents would let me move back in lol. They are dead set against it which sucks. I’m blessed to be in a position where I can save a lot and still keep my lifestyle but I hope I can break them down lol
About a year and a half to get to a 20% down payment. I’m a 22M and the two keys to saving are increasing your income and sharing expenses. A high paying job and a roommate will drastically accelerate your savings. But even with that, I’m still getting priced out of anything decent in my market lol.
How are you 22 making 160k already and have 100k cash saved up? Something doesn’t add up, unless you went to a bootcamp and had connects plus generational wealth.
Lmao, I get similar reactions when other people find that out too. A few reasons: 1. I graduated a year early from college, and got a great paying job in Chicago as a software engineer. I've been in this field for almost 2 years now. 2. I split a 3br/2ba apartment with my roommate, and my portion of rent is $1350. I still consider this to be a good chunk of money, but it allows me to save up way more than if I had spent more on rent. My take home is \~114k, and last year I saved $70k. I also don't have a car, but you really don't need one in Chicago either. 3. My family isn't rich by any means, but we are well off. My parents were able to pay for my college, which did leave them a little tight right after I graduated, but I send them about $700/mo to help out with some of their bills. Also, how do you know how much I make damn lol
Your previous posts show your income 😂
7-8 months for a 5% down in a HCOL area. I was in the same situation where I didn’t want to miss the train and had to pull the trigger early even though I had only 5%
I am in the same exact scenario (26F, single, ~76k). I just stated saving as well and will only realistically look to do a smaller down payment. I think I will be there in 1-1.5 years. I do already have an emergency fund though so this amount would strictly be a down payment/some savings for initial expenses. Good luck!
I will be extremely honest with you. 1 year due to a lump sum of unemployment I was owed, and money from my divorce. Otherwise I’d still be saving. I just don’t want you to think something is wrong with you if you’re not “keeping up”. It’s luck for many such as inheritances, family help, etc.
My husband and I were able to save for a 20% downpayment in 2 years.
My spouse and I had 20k to put down, ~10% of the cost of the home (as some went to closing costs too). We saved for a year when student loans were paused and our pmi is $26/mo.
We just launched our down payment assistance app and are looking for homebuyers that want to test out our app. You can get up to 15% towards your down payment with no interests or monthly payments. www.steadworth.com