Looking for house info

[KellyT2]

32, 20% Down.

 

[cats mom]

So I'm sorry if this is a little off topic but I'm trying to set a plan for the next few years so it is budget related....
At what age did you buy your first house?
And what kind of down payment is good to have saved up?
Like I said I'm in the very beginning stages of this but with 2 kids it's something I really need to start considering..thanks for the info!

27
We used an FHA loan with only 8% down on our first house. But we were able to put 25% down on our next house.

I agree that having at least 20% down is ideal. I have no idea how folks do that in really high cost areas though.

Some recent numbers from our area:
Mean detatched SFR price $1,322,243
Mean townhouse/condo price 582,018
Saving up $120,000 is no easy task for a young person or couple just starting out.

Thus why y'all will likely be bailing out CA folks who bought houses that were waaay more than they could afford for years to come.

 

[crisi]

I was 20 and still in college. I think I had 10% down and a FHA first time homebuyers loan. I bought it with my fiancee (now my ex-husband). Both of us worked through school and it was an older home in South Minneapolis - $59k in 1988 - but as someone said up thread, it was a struggle to save that much. And when he left a few years later - a REAL struggle to keep it on one income. Wouldn't have changed anything though, buying that house set me up well for the future.

 

[mamaLori05]

My DH and I built our first house while we were engaged at age 23. We put 5% down, did a lot of sweat equity, and then refi'd about a year later to dump PMI (the value of our house also had gone up significantly). Worked wonderul for us. We sold that house last spring, and my DH and I (30) built our 2nd home, putting 20% down.

 

[Calliaz]

I'm almost 40 and never have or will own a house. I'm getting to the point where I am too old and don't care anymore. I feel like a total loser but what can you do.

I think in the US too many people are fooled into thinking that owning a house is always a good thing. For many people owning is not the best financial decision. A house isn't really a great investment. Unless you downsize when you are older, people don't see the return on their initial investment.

Don't feel like a loser!

 

[mamaLori05]

I think in the US too many people are fooled into thinking that owning a house is always a good thing. For many people owning is not the best financial decision. A house isn't really a great investment. Unless you downsize when you are older, people don't see the return on their initial investment.

Don't feel like a loser!

I do agree not to feel like a loser, houses aren't for everyone!!

However, I have to disagree with not seeing a return on initial investment. Our last house went up in value by $70,000 in 5.5 years from when we initially purchased/built it. When we sold it last spring, we put the money we made from it towards our new house. We moved into our new house in Nov, and already our house is worth about $30,000 more than when we purchased it. The key for us is to build a house in a growing area and do a lot of sweat equity. It's a lot of work, but can be done. You don't have to put a lot of MONEY into a house in order to get a lot back, but you do have to be willing to do a lot of WORK.

 

[amyy]

I just bought my first house last summer at the age of 39. I bought in a "rural" area and did not have to pay PMI. I put down $1,000 as a good faith gesture. Buying a house was the best option for me. I am so happy having a basement, garage, little bit of land etc. Everyone morning I wake up and think about how much I love my house.

The $8,000 tax credit was nice. Our state was also doing this Gift of Green program which paid a couple $1,000 towards my closing cost. Without these 2 programs I would never have been able to afford a home.

I took a first time home buyers class and highly recommend it.

 

[Calliaz]

I do agree not to feel like a loser, houses aren't for everyone!!

However, I have to disagree with not seeing a return on initial investment. Our last house went up in value by $70,000 in 5.5 years from when we initially purchased/built it. When we sold it last spring, we put the money we made from it towards our new house. We moved into our new house in Nov, and already our house is worth about $30,000 more than when we purchased it. The key for us is to build a house in a growing area and do a lot of sweat equity. It's a lot of work, but can be done. You don't have to put a lot of MONEY into a house in order to get a lot back, but you do have to be willing to do a lot of WORK.

In general, houses are consumer goods and not investments. You have to pay money for upkeep, insurance, taxes, etc. Typically, houses don't appreciate more than 4% a year (average). You can get a better return than that on a good stock market investment and you don't have to pay to repair the water heater on your stock. Yes, that's simplistic, but for the average person owning a house isn't going to make them money. It might save them money over renting, but it likely will not make them money.

We have a ton of equity in our house because we bought low and put in a lot of sweat equity. However, unless we sell it we won't realize any of that as profit. And, as time goes by, we'll have to spend more money upgrading and repairing. Most people don't want to treat a house as an investment by repairing and flipping all the time. They just want a place to live.

 

[roadtripper]

We were 30 and 31, and put down a whopping 5% because my husband's uncle died and left us a small inheritance--thank you Uncle Robert! We had been trying to save, but having a hard time. We paid PMI for about a year, then dropped it due to the house's increase in value (probably hard to do now). Had a hard time making the payments for the first year or so, since our rent had been 550, and the mortgage was 874 (this was 1996). Every little expense was a stress--had to buy a lawnmower, oven heating element broke, front door lock broke. These were 100 dollar expenses, but killed our budget. So I'm glad we did it, but the first year or so was hard. The good news is, we sold our house 6 years later for double what we paid for it, but don't count on that in this market.

 

[NMW]

25 and 26. We put 20% down. This was 1996. I gave birth to our first child the month after we closed on the house. It was new construction and I was terrified it wouldn't be done in time. Fortunately, it all worked out.

 

[bettymae1121]

I bought at 25 with 3% down. Of course the condo was only $100,000 so I only had to put down $3k! It worked out, I bought in '01 just before the market took off, and sold in '05 at the peak (now how's that for timing!). But today I'd say 20% (or more) is best, 15% is okay and 10% is the minimum. In addition to the down payment you'll need money for other closing costs, the actual move, and any improvements to your new home (even if it's just curtins and paint, it can add up). Plus, you want a nice chunk of emergency savings (8 months living expenses is recomended) left over after all is said and done.

Even if you're looking at a modest house, that is A LOT of money. Unless you make a really good income, it's going to take you a while to save up that amount. But, once you figure out that number to shoot for, you'll have a goal!

 

[Halbleib1]

I was 26 and my husband was 27 when we bought our townhome in 2006. We put a $1000.00 down at the time we signed the contract with the builder. This was to place a hold on the house while we were waiting to close. We did an 80/20 loan at a fixed rate with no PMI. We paid all closing costs out of pocket. We pay our own property tax and homeowners insurance. Be aware that if you escrow your property tax/insurance the mortgage company/bank will not pay you interest on that money. Also if you do this be sure to watch and be sure that they pay the taxes/insurance when they are due as there have been some reports of some not paying or paying late.

 

[englishteacha]

21 years old, 20% down. House was only $62K, and the down payment was a "gift" of sorts. My MIL gave her daughter, my SIL, a set amount of money for home improvements. When DH and I started looking for an apartment (we were college kids about to get married), she offered us the same amount she'd given her daughter towards either rent or a home. Essentially it was DH's inheritance, and she wanted to see him use it. She passed away 18 months after we bought our house. So, I suppose were were given a down payment, but I think my DH would rather have his mother back, don't you?

ETA: We've been in our home for almost 8 years. We've thought of moving to a bigger place, but our goal has always been to be able to afford our home on one income. Since it's just the two of us and the cat, the tiny house is fine.

 

[photographymom517]

I was 21, DH was 24...he had been working full-time since he was 16 years old...I was a full-time college student with a part-time job. We were very lucky to be able to put down 20%...but the house we bought was also very cheap (under $50K)

My best suggestion is to have as much saved as possible...as close to 20% as possible. If you DON'T have 20%, make sure you ask your lender if you can get a loan where you can pay on your Principal at ANY time. Some loans do not allow you to do that. If you don't have 20% down & have to pay PMI, just keep saving as much as you can...then send in a payment to your lender with a note that says "Pay entire amount of $xxx to Principal ONLY"...write this in HUGE letters & highlight it. Also make a photocopy of your letter with payment check so if they don't apply it ALL to principal, you can call them & make them fix it asap.

That is the best advice I can give...its what we did on our current home & I highly suggest that if you don't have 20% down.

 

[HugsForEeyore]

I'm almost 40 and never have or will own a house. I'm getting to the point where I am too old and don't care anymore. I feel like a total loser but what can you do. Most of my friends bought their first house between 23-27. Must be nice having mommy and daddy give you a down payment. (for real, they all had houses just basically handed to them).

Unfortunately, I live and work in the Boston area and only have one income that is under 100K (and know my budget limits I've seen the repurcussions of people buying houses they can't afford...). I like my job so relocating to a cheaper area is not an option.

Same here. I was surprised to read your post since sometimes I also feel I am the only one in America who won't own a home ever. I also accepted it and no longer even ponder it. I also live in a high cost of living area, where starter homes are well over $300,000. I also have no parental money to help, and no dual income from a spouse. Home ownership simply is an impossibility for me. I also have a few older coworkers in the same boat - never married, no money from families, who are always going to be apartment renters. Just isn't going to happen for some of us.

Funny thing is, I knew when I was in high school that I would never own a home. I already knew my earnings would never be enough to make it happen. Heck, in my area you need to earn over $50,000 for afford a one bedroom apartment not in a bad area.

I guess you don't read much on these boards about people never owning a home, since most DISers tend to be "doing everything right" financially to afford trips to Disney World. Right now I am just thrilled to even have a job and some place to live.

 

[AnnaS]

24 and 26 - 35/36% down.

 

[TheBigBadWolf]

We were 19 and 21 when we bought our first home. We only put 12% down but this was in the days before PMI.

 

[Melrosgirl]

I was 20 when I bought my first house. 5% down at the time. House was $100,000.

 

[Kriii]

DH and I were 29 and 30 when we bought the first house in the mid 90's and we had a 30 year/fixed loan with 10% down. Downpayment was a loan from parents that we repaid over the next few years. House appreciated and we dropped the PMI pretty quickly. We made some improvements on an already nice house and when it sold in 2005 we made a good profit on it.
I remember the bank being very particular before making the loan, unlike when we bought in 2005.
We also bought last year and find that today's market is quite different than when we bought in 2005. A minimum of 20% down, good credit and job history and no creative loans these days. You are in a good position right now being a first time buyer without a home to resell if you meet the financial criterion for a loan. We took a significant loss on our last house and our seller took a bath on the price we paid for our current home. Biggest piece of advice: don't ever borrow the max amount the bank says you are eligible for or you will be house poor. Hope your quest for a home is successful.

 

[imLissy]

We're in the process of buying a house now. We're 24 and 28. We're puting 20% down and we just made an offer for 290000. It took me three years to save for a down payment, but I have no expenses other than rent, my car, food...

The biggest problem we're facing is, people don't want to sell their houses for what they're worth. They all bought these things in 2006 and paid $327, but they're not worth that much anymore. This house we put an offer on, they said they can't take lower than $309 and want us to sign something that says we'll pay for the difference in price for what is appraises for out of pocket if the bank won't give us the money. Who the frell is gonna do that??? The house isn't THAT nice. /end rant