Is anyone under 35 without a rich mommy and daddy be able to buy a good house?

[Anonymous]

I was and I did. Bought a 3 bedroom house in Downtown Silver Spring completely on my own, without any $$$ help from anyone.

Stop complaining.

[Anonymous]

Anonymous wrote:OP, I don't think buying a house has been the hurdle for under 35. We have all seen people buying houses without a down payment or even jobs. I think it is clear that anyone can buy houses. The more interesting question is: anyone under 50 without rich daddy/mommy paid off the mortgage to their house?

But why would you want to? There is pretty much no benefit to paying off a mortgage before you retire. Many of us want a mortgage for the interest rate deduction, which substantially helps offset my tax liability. I would much rather have significant savings - IRAs, 529s, cash, stocks, etc. - than waste my savings on paying off a mortgage. Almost every good financial advisor will tell you the same thing.

Owning your home free and clear at 35 is a total waste of your savings unless you don't bring in any income (or a very small amount).

[Anonymous]

Grammar Police! Stat!

[Anonymous]

Anonymous wrote:Grammar Police! Stat!

You really need a life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, I don't think buying a house has been the hurdle for under 35. We have all seen people buying houses without a down payment or even jobs. I think it is clear that anyone can buy houses. The more interesting question is: anyone under 50 without rich daddy/mommy paid off the mortgage to their house?

But why would you want to? There is pretty much no benefit to paying off a mortgage before you retire. Many of us want a mortgage for the interest rate deduction, which substantially helps offset my tax liability. I would much rather have significant savings - IRAs, 529s, cash, stocks, etc. - than waste my savings on paying off a mortgage. Almost every good financial advisor will tell you the same thing.

Owning your home free and clear at 35 is a total waste of your savings unless you don't bring in any income (or a very small amount).

Without mortgage: I keep $20k of income and spend an extra $8k on taxes. Net $12k.
With mortgage: I spend $20k of income on interest and save $8k on taxes. Net $12k.

Only if the mortgage interest deduction put you under the line for a lower bracket would you actuall save money.

Plus, there is the warm fuzzy feeling of having no debt. Agreed with you, however, on the foolishness of being house-rich/cash-poor at 50. But -- paying down the mortgage as part of a balanced savings strategery (e.g. 10% to 401k/retirement, 5% to rainy day fund, 2.5% to stock trading account, 2.5% to paying down the mortgage) is not a bad idea by any stretch, IMO.

[Anonymous]

We did. No money from parents. We bought around age 32. We saved a lot, made a list of what we wanted in a house, and then as we looked - figured out what we were willing to give up. It's frusterating - I know. You work hard and think you can have a nice house, and you realize "nice" costs $1 million. So you start to figure out what you can and cannot live without. We didn't need a large kitchen, we could live without walk-in closets, we can learn to live with smaller rooms. But we wanted some semblance of a yard, two full bathrooms, and to live close-in so we wouldn't spend our lives communting.

We did end up spending more than we wanted, but we've made it work. Its not my dream house to be sure, but it has what we need. And I'm really glad we choose location over size and other luxeries (nice closets, big bathrooms).

[Anonymous]

We are 27 with a child and renting. We both work and make about 130K combined. DH is extremely fiscally responsible and for him it makes more sense to keep renting. We only have about 60K saved for DP. I am so ready to try to buy even at the expense of having to leave the area and have to commute for our jobs. Is that crazy. Right now, renting a 2BR apt near Old Town we both only have about a 15-20 min commute. I would love to own a home and be able to decorate and feel like it is mine. Sounds so silly. I want a yard for my DS to play in, etc. I feel like we are so far away from our goals but reading this thread makes me feel like we aren't alone.

[Anonymous]

We will soon be purchasing a home with the help of soon-to-be DH's rich mommy and daddy. DH and I are both in public service and have saved some for a down payment, but it is a slow, crawling process. I do not feel bad about accepting help from the IL's. DH and I both work very hard and are fiscally responsible. I have never ever had family help me with anything in my life, and it feels nice to be so welcomed into his family (and I don't mean just fiscally).

[Anonymous]

Anonymous wrote:We will soon be purchasing a home with the help of soon-to-be DH's rich mommy and daddy. DH and I are both in public service and have saved some for a down payment, but it is a slow, crawling process. I do not feel bad about accepting help from the IL's. DH and I both work very hard and are fiscally responsible. I have never ever had family help me with anything in my life, and it feels nice to be so welcomed into his family (and I don't mean just fiscally).

Just be prepared for some degree of jealousy from less fortunate friends, or to have IL's that think they own you guys.

[Anonymous]

My advice is buy now when interest rates are low. Don't make the mistake of focusing only on purchase price. If you scrimp for 7 more years but rates are much higher the extra money you saved could make zero difference.

Also, buy smaller and older than you aspire to, but in a good school district, in Arlington. Property values are unlikely to go down much more here, and if you can live in it for about 5 or so years, you will be able to sell at a profit and move up to a nicer place. Not so if you live further out or in a marginal school district.

[Anonymous]

Not sure if this will make you feel better but I am one of the people who bought a condo in the mid 90s, made alot selling during the boom but even then we could not really afford to buy a house in Arlington. When we sold at the height of the market, buying was crazy. There was very little on the market, you never had time to look and compare, crazy bidding wars etc. People who made money ended up putting it right back into the house and still having large mortgages. I did not want to buy at the top of what we could afford and I am glad that we didn't.

We ended up moving out to the burbs. While our house has held most of its value and we paid alot off when we purchased, we would have far more selection if we were purchasing now. I hate the idea of moving, don't really have house envy, and we're comfortable so we are staying put. I know alot of people who sold and traded up during the boom who are just as unhappy as you are now. Many of these people have bought more than they can really afford and had counted on the market going up not down or staying the same.

[Anonymous]

OP how are you investing the money that you are saving for a down payment?

[Anonymous]

We bought in late 2007 in Vienna (FFX Vienna, not town of Vienna). We bought a house for 600k and put down about 12%. No parental help. I was 26 and DH was 31. We saved the rest of our cash reserves for the inevitable maintenance.

Look, you are ready to buy a house now. It sucks that you weren't old enough/settled enough to buy before the boom and make a killing. So what? It sucks for people who are in their 60s now and saw their 401ks plunge by half over the past 3 years. Each generation gets their benefits and drawbacks. It's nonsensical to be upset about timing.

There are some very nice townhomes--modest, but good schools and great commuter access--in my neighborhood that can be had for your budget. If you are willing to live in a rambler, you can probably find one for 500k-ish in Vienna. But hey, I guess Vienna is the boonies to some people. Also, so many people I know who complain about house buying think that granite counters and SS appliances are somehow necessary but don't want to pay the price necessary for something that has been recently renovated. Tradeoffs, people!

[Anonymous]

Anonymous wrote:My advice is buy now when interest rates are low. Don't make the mistake of focusing only on purchase price. If you scrimp for 7 more years but rates are much higher the extra money you saved could make zero difference.

Also, buy smaller and older than you aspire to, but in a good school district, in Arlington. Property values are unlikely to go down much more here, and if you can live in it for about 5 or so years, you will be able to sell at a profit and move up to a nicer place. Not so if you live further out or in a marginal school district.

Agree with this. I have many friends who are nickling and diming over a theoretical 10k or 20K drop in house value (which seems unlikely at this point in the more desirable parts of our area), but don't seem to understand that these low mortgage rates are what really makes a big difference--and those low rates are certainly not going to last forever.

[Anonymous]

Anonymous wrote:HHI of $50k in 2000, rising up to $175k today.

What do you do now to make the salary leap?