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1/22/2020 12:12:56 PM
Posted: 9/18/2009 2:09:28 PM EST
I was talking with our realtor about buying a new house and she said financing is harder to get and being as it is our second house we will have to come up with 15-20% down on it. Now Im not exactly a great saver so how does one come up with that kind of change? My wife and I both make good money and have good credit. Are we stuck with saving for a few years or is there a way around it?
Link Posted: 9/18/2009 2:11:05 PM EST
Originally Posted By stretch415:
I was talking with our realtor about buying a new house and she said financing is harder to get and being as it is our second house we will have to come up with 15-20% down on it. Now Im not exactly a great saver so how does one come up with that kind of change? My wife and I both make good money and have good credit. Are we stuck with saving for a few years or is there a way around it?



There are ways around it if you have good credit. Check your IM.
Link Posted: 9/18/2009 2:16:09 PM EST
[Last Edit: 9/18/2009 2:16:28 PM EST by mattja]
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.
Link Posted: 9/18/2009 2:20:07 PM EST
Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.


It probabaly is common. We got our house 2 years ago with a first time homebuyers loan(Im 24) @5.25% with 0 down. We could afford what we got at the time but now make more and are looking bigger. It might just come down to saving up and that is fine. I just notice that people in my neighborhood hop in and out of here like its nothing. So I assume there is another way to skip the big down payment.

We are also finishing out the basement(split level) and will have sweat equity from it. Granted we will take a little hit on it here but its not nearly as bad as the rest of the country.
Link Posted: 9/18/2009 2:22:01 PM EST
have home prices bottomed out where you live? i wouldn't be 1) buying or 2) throwing a large chunk of cash down if i would be "losing" it
Link Posted: 9/18/2009 2:22:21 PM EST
Prior to recent years this was a common practice. People saved for years and years until they had 20% to put down. No money down homes or worse yet money back homes are a big reason we are in the situation we are in today. People are willingly walking away from their mortgages when they can continue their payments because they do not stand to lose anything from it. These same people were also able to buy 3 or 4 homes at a time because there were no out of pocket expenses.


Save your money until you can do at least 10% if not 15-20%. Not only does it give you immediate equity but you also get a lower interest rate to reward you.
Link Posted: 9/18/2009 2:23:15 PM EST
FHA 5% down
Link Posted: 9/18/2009 2:29:39 PM EST
[Last Edit: 9/18/2009 2:32:18 PM EST by Danger_Close]
Originally Posted By stretch415:
Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.


It probabaly is common. We got our house 2 years ago with a first time homebuyers loan(Im 24) @5.25% with 0 down. We could afford what we got at the time but now make more and are looking bigger. It might just come down to saving up and that is fine. I just notice that people in my neighborhood hop in and out of here like its nothing. So I assume there is another way to skip the big down payment.

We are also finishing out the basement(split level) and will have sweat equity from it. Granted we will take a little hit on it here but its not nearly as bad as the rest of the country.



Why are you moving after only 2 years? After Realtor fees, etc. you'd only break even in the best of markets.

ETA: I'd save up AND build a little equity at the same time.
Link Posted: 9/18/2009 2:29:48 PM EST
We bought just a few months ago for the first time. Even with 20%+ down, you're gonna get the feeling nobody wants your money. Persistence pays off, but you're gonna have to do people's job for them a lot.
Link Posted: 9/18/2009 3:44:07 PM EST
Originally Posted By Danger_Close:
Originally Posted By stretch415:
Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.


It probabaly is common. We got our house 2 years ago with a first time homebuyers loan(Im 24) @5.25% with 0 down. We could afford what we got at the time but now make more and are looking bigger. It might just come down to saving up and that is fine. I just notice that people in my neighborhood hop in and out of here like its nothing. So I assume there is another way to skip the big down payment.

We are also finishing out the basement(split level) and will have sweat equity from it. Granted we will take a little hit on it here but its not nearly as bad as the rest of the country.



Why are you moving after only 2 years? After Realtor fees, etc. you'd only break even in the best of markets.

ETA: I'd save up AND build a little equity at the same time.


We just bought a smaller starter home and now after some good fortune are able to afford a better more perminent home. Its just a odd feeling customizing a home to your taste full knowing you have no intentions of keeping it. Some things will add to the value but others will only appeal to certain buyers.

We will most likely stay put but I was just curious how everything works. Its really a shame we wasted our buying opportunity and went so small.



Link Posted: 9/18/2009 4:07:14 PM EST
Are you converting the first house into a rental? If so, the new rules (back in June anyway) were that you had to have 30% equity in the house you're making a rental.

What fun it is to have to play by a different set of "rules".
Link Posted: 9/18/2009 4:19:04 PM EST
Originally Posted By EvilRhino:
Are you converting the first house into a rental? If so, the new rules (back in June anyway) were that you had to have 30% equity in the house you're making a rental.

What fun it is to have to play by a different set of "rules".


says who?

Link Posted: 9/18/2009 4:21:59 PM EST
Link Posted: 9/18/2009 4:24:42 PM EST
[Last Edit: 9/18/2009 4:26:51 PM EST by bdgenz]
Always put 20% down, represent yourself, save all kinds of $. No mortgage insurance, pay your own taxes and only have to qualify for a fraction of what you'd have to otherwise. Represent yourself and you collect 3% (let the buyer cover closing costs up to max allowed by law instead of paying a buyers agent).

How? Save your pennies, take a car title to the bank and finance it, sell some shit (like a house).

Sounds like you could do it with a little creativity, without too much trouble, assuming your buying a median priced house.

aimloan.com. Posts all the rates, points given your credit score, buydown rates etc. Truly no-brainer, self-serve mortgages with no surprises. On a $33k closing, I was off $35 from my estimate I worked up for my son.

Link Posted: 9/18/2009 4:26:30 PM EST
The era of cheap and free credit is over. Get used to it.
Link Posted: 9/18/2009 4:27:08 PM EST
How exactly is one not a "great saver"?
Link Posted: 9/18/2009 4:27:18 PM EST

Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.
Holy hell, I could buy a fairly nice house outright for what you're saving for a down payment.

Link Posted: 9/18/2009 4:34:09 PM EST
Originally Posted By Evilsmurfkilla:

Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.
Holy hell, I could buy a fairly nice house outright for what you're saving for a down payment.



thats because he is in cali
Link Posted: 9/18/2009 4:34:14 PM EST
[Last Edit: 9/18/2009 4:36:35 PM EST by glock27bill]
I'm going through this now.

The issue is that the place I'm buying has a high land-to-house value ratio.

Small house on 50+ acres.

Because the banks are viewing this as a land purchase, I have to put 30% down, even thought the house is owned by an investment company and was just remodeled (new kitchen, roof, A/C & heat, hot water heater, etc) with no one living there. Ended up with a 5.25% loas over 15 years.

The best I could do before finding this lender was 6.5% on a lon that readjusted after 5 years, or 7% fixed through farm credit. My bank (Sun Trust) would ot even underwrite it.

And my FICO is 830.
Link Posted: 9/18/2009 4:36:30 PM EST
You should put down enough that you don't have to pay for this:

PMI; it is money down the rat hole.

http://www.frbsf.org/publications/consumer/pmi.html
Link Posted: 9/18/2009 4:41:32 PM EST
Saving take discipline, period.
You just have to do it.
It took me a few years to put aside enough to buy a house.
Just dealt with apartment living until I could afford the down payment / closing / move in related expenses.

No such thing as a free lunch.
Start putting as much away as you can afford to....comfort needs to take a back seat to neccesity.
Its good practice to forego some of the extras in life you enjoy to build that nest egg.

You will be glad you sacrificed...and you wont really understand why until you have the experience behind you.
Tough to explain, but its a very real thing.
Link Posted: 9/18/2009 4:48:40 PM EST
Originally Posted By glock27bill:
I'm going through this now.

The issue is that the place I'm buying has a high land-to-house value ratio. Small house on 50+ acres.


Did you look into Farm Credit Services? They're used to handling "land loans", and they only require 15% down.
Link Posted: 9/18/2009 4:51:13 PM EST
Originally Posted By stretch415:


It probabaly is common. We got our house 2 years ago with a first time homebuyers loan(Im 24) @5.25% with 0 down. We could afford what we got at the time but now make more and are looking bigger.


Since you guys are making good money now why be in such a hurry to give it to someone else so soon? I would think it would be easy to save up now with the higher income and cheaper cost of living.

your just getting started, stick to the starter home for a few more years and don't sink to much money into it.
Link Posted: 9/18/2009 4:54:39 PM EST
20% also gives you a nice break in your payment, too. The bank doesn't have to get mortgage insurance.
Link Posted: 9/18/2009 4:56:57 PM EST
You'd need at least 20% down now for a primary residence. If it were a 2nd home, you could get away with less.

Kudos to the guy who saved up $100k. I think the most I ever saved was $60k. I think the average American has no more than $10k in their savings account. I'm trying to get to $50k by springtime because I want to buy a 2nd residence (Condo)
Link Posted: 9/18/2009 5:02:46 PM EST
when presented with the opportunity, I generally will put other people's capital at risk, not mine....esp at only 6%.

so the answer is put down as little as you can
Link Posted: 9/18/2009 5:11:03 PM EST
[Last Edit: 9/18/2009 5:12:30 PM EST by EvilRhino]
Originally Posted By markl32:
Originally Posted By EvilRhino:
Are you converting the first house into a rental? If so, the new rules (back in June anyway) were that you had to have 30% equity in the house you're making a rental.

What fun it is to have to play by a different set of "rules".


says who?



Said the guy who does "exemptions". I tried 3 times. The 3rd time, he agreed to the exemption of having to have the 30%, but at the last minute noted that they did a "drive-by appraisal" on my new property instead of a full . He did this 2 days before closing and everyone at the company knew their appraisers were 3 weeks out. This was BofA. Not my first choice, but my cousin is actually a loan person who gave it to a buddy to avoid "family" issues with the loan. I certainly didn't get any favors. Their bank didn't get any more money, my current mortgage holder did. Until I sell

I had to pay $11k to leave my old house that I have a lease purchase on. And I have great credit, 800ish. And I had done this once before with my condo. Their new fear is someone doing a "buy and dash" where you buy a cheaper house and walk from your primary.

But the "women" on section 8 who came by to look would get $1500/month for free. Each had 6 kids, one in a Suburban, one in a new trailblazer. None had work histories. All their stories sounded the same. " I have 6 kids, 9, 6, 5,4,2,1. I've been in the program 8 years". So yeah, different set of rules.
Link Posted: 9/18/2009 5:17:31 PM EST
Originally Posted By Evilsmurfkilla:

Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.
Holy hell, I could buy a fairly nice house outright for what you're saving for a down payment.



The homes I am looking at are in the $800K-$1 million range. And that is for a 4 bedroom rancher, nothing fancy, on a small lot. This fucking place is a nightmare.

If I didn't make so much money at my job I would get the hell out of dodge.

Now, there are more affordable areas around here, but they are often in Section 8 areas or have crappy schools.

If you want to live among civilized people in a good school district, you have to be prepared to pay $800K+.
Link Posted: 9/18/2009 5:26:00 PM EST
Originally Posted By NoVaGator:
when presented with the opportunity, I generally will put other people's capital at risk, not mine....esp at only 6%.

so the answer is put down as little as you can


That makes you make riskier decisions than you would have. That mindset will eventually land you in deep shit if things do not go 100% perfect for you
Link Posted: 9/18/2009 5:45:41 PM EST
Originally Posted By TNARShooter:
Originally Posted By NoVaGator:
when presented with the opportunity, I generally will put other people's capital at risk, not mine....esp at only 6%.

so the answer is put down as little as you can


That makes you make riskier decisions than you would have. That mindset will eventually land you in deep shit if things do not go 100% perfect for you


Some people consider bankruptcy or foreclosure "not deep shit".

I think it has something to do with the fact that everyone's a special and unique flower these days. We've got so many people trained to think their bowel movements are artistic marvels that when a whole bunch of 'em lose their shirt, losing one's shirt becomes the "in" thing to do, and those who consider their honor in matters of finance become stodgy and un-hip.
Link Posted: 9/18/2009 5:56:08 PM EST
We just bought a house 18 months ago and they barely blinked at giving us a loan. We just refinanced two months ago and the bank wanted all kinds of ridiculous things and made us jump through hoops. Things have changed a lot in the past year and a half.
Link Posted: 9/19/2009 1:46:09 AM EST
I always thought the idea was to save up, put down as much as you can, pay it off as fast as you can, and go back to living debt free.

FWIW, I'm currently saving so I can buy a house as soon as I get out of this shithole (Massachusetts). I'm single and I've already got enough put away in the last three years to do 20% down on a decent house in most parts of the country. With two incomes, you should be able to save fast if you're actually trying, especially since you "make good money".
Link Posted: 9/19/2009 2:49:57 AM EST
Originally Posted By TNARShooter:
Originally Posted By NoVaGator:
when presented with the opportunity, I generally will put other people's capital at risk, not mine....esp at only 6%.

so the answer is put down as little as you can


That makes you make riskier decisions than you would have. That mindset will eventually land you in deep shit if things do not go 100% perfect for you


being locked into a house that's gone down 35% in value after you've put $100,000 of your own money down is my definition of "deep shit"

if I put nothing down....yeah it sucks....but I didn't really lose anything.



Link Posted: 9/19/2009 5:39:01 AM EST
Originally Posted By mattja:
Originally Posted By Evilsmurfkilla:

Originally Posted By mattja:
So, you expect to save overnight?

It took me a couple of years to save $100k for a down payment, and that's on ONE salary. My wife does not work. We pinched pennies on everything except my ammo whoredom.

We're looking at taking advantage of the down housing market by next summer to move up to a bigger home in a better school district.

I fully expect we'll need $150K-$200K to get into the area we want. And it will be a modest home, nothing fancy.

Anyway, after all is said and done, we would have been saving for 3-4 years.

I thought people saving for 3-5 years was common.
Holy hell, I could buy a fairly nice house outright for what you're saving for a down payment.



The homes I am looking at are in the $800K-$1 million range. And that is for a 4 bedroom rancher, nothing fancy, on a small lot. This fucking place is a nightmare.

If I didn't make so much money at my job I would get the hell out of dodge.

Now, there are more affordable areas around here, but they are often in Section 8 areas or have crappy schools.

If you want to live among civilized people in a good school district, you have to be prepared to pay $800K+.


Holy carp! I would get the hell outta dodge and live like a king in a free state!

Around here you get a fortress for $850K, w/plenty of storage for the guns of your choice!

Add a moat and your GTG



Link Posted: 9/19/2009 5:59:26 AM EST
I would save, the more you put down first, means the less you'll pay later.
Link Posted: 9/19/2009 6:08:25 AM EST
Originally Posted By stretch415:
I was talking with our realtor about buying a new house and she said financing is harder to get and being as it is our second house we will have to come up with 15-20% down on it. Now Im not exactly a great saver so how does one come up with that kind of change? My wife and I both make good money and have good credit. Are we stuck with saving for a few years or is there a way around it?


Start saving, and both of you get second jobs.
Link Posted: 9/19/2009 6:09:48 AM EST
Our current house is brand new built in 07. I think it will sell fairly well when the time comes however there are multiple builders here throwing up new ones as fast as possible(we are in a booming town that has 3 proposed elementary schools in the next few years to help with the growth). I think our market here is right and being as its a sub $200K house with all the features of a larger more expensive one we will have a good buyer turnout.

Like most of you say we will probably sit on it. We will start saving our money a bit more and go from there. Regarding the guy asking aobut our saving habits. We(I) really like to spend stupidly. IE we eat out alot and buy whatever whenever we want for the most part. While this isnt the smartest thing to be doing it is the right time to be doing it(before we have kids and are really strapped down). So once we cut out our dumb spending habits we will be able to start throwing money into savings for stuff like this. Until then though lifes to short it seems to live on the basics and save for tomorrow.
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