Where do people keep these huge amounts for house down payments?

[Anonymous]

I repeatedly see people on here say they have $150K, $300K, and upwards available for down payments on homes. Sorry for the stupid question but where is this money kept? Are people talking about equity in their current home? Cashing in options? 401K loans? Or is it all just liquid cash sitting in a savings account?

[Anonymous]

I think for most people, that's equity from a previous home. Most people aren't starting with $300k for a downpayment!

Especially on these boards, which skew wealthy, you might also have people with a down payment from parents, but even that I think is usually $100k or less, not $300k!

We did save a fair amount - about $150k - for our down payment, but I think that's unusual for people in our income bracket (we made about $150k at the time). My husband had saved about $50k before we were married (he's just a saver, that was accumulated over 8 years of working) and then as soon as we married, we started socking away about $2k a month, plus our tax return each year. About 3 years later, we bought our house. But I think we're an outlier, that's tough to do.

[Anonymous]

First time buyers who are normal do not have $100k+ for a down payment. Your typical first time buyer is putting 5-10% down. For a $500k house that's $25-30k. That's not too bad. Stories of people putting 20% down that equate to $100, 200, 300+ k are from people who got help from mommy and daddy or who built equity up.

[Anonymous]

Low interest savings account for us! Our down payment was 150K, and on top of that we had to have a bunch of cash on hand tape for that proof of solvency requirement (I forget what it’s called) because they didn’t accept our 401K as proof.

[Anonymous]

I’d have to ask my parents.

[Anonymous]

Anonymous wrote:Low interest savings account for us! Our down payment was 150K, and on top of that we had to have a bunch of cash on hand tape for that proof of solvency requirement (I forget what it’s called) because they didn’t accept our 401K as proof.

Oh and we got a 10K gift from my parents and a 20K loan to pad our bank account, which we returned within six months.

[Anonymous]

Ours was in our savings account until we needed it. Took us 7 years of planning and 4 years of marriage, but then we were ready.

[Anonymous]

I think *some* people are able to save up to $100/150/200. Of course, it wouldn't be that hard if you have a pretty high HHI and no kids. It could also come from a bonus a few years in a row.

[Anonymous]

We put down 60k on a 525k home. But we were mid-30s. No help from parents.

We know a lot of people who got around 50k (or more) from parents, plus had savings. We also knew a few who bought homes using inheritance from a grandparent who died. All of those people bought bigger, nicer homes than we did and built equity more quickly than we did. They also had cash on hand to fix up their houses after they bought, where as we had no money left at all and were in super saver mode to build our emergency fund back up.

The idea of having 300k for a first home is insane to me, though. If we'd had that much capital, we would have bought a condo for cash as an investment, lived in it while saving what would have been our mortgage or rent payment, then financed a home with 20% down from savings and rented out the condo. The idea of having 300k cash on hand and using it to buy a $1m+ house seems dumb to me, but I don't come from money so what do I know.

[Anonymous]

We cashed out our 401Ks to come up with 20% down. We were in our 30s but were broke. No family help, low(ish) paying jobs.

[Anonymous]

We only had to put $15k down on our first home in 2003 when the rules were super loosey goosey! We made 100K on the house, rolled into our next home. That house made $250k which we rolled into our second home.

[Anonymous]

Anonymous wrote:First time buyers who are normal do not have $100k+ for a down payment. Your typical first time buyer is putting 5-10% down. For a $500k house that's $25-30k. That's not too bad. Stories of people putting 20% down that equate to $100, 200, 300+ k are from people who got help from mommy and daddy or who built equity up.

There are people who save up a big chunk. We did. We kept the money in either revolving CDs or a high interest savings account, depending on interest rates. We also cashed out some stock that had been purchased years earlier, though we didn't explicitly save in the market for our down payment.

[Anonymous]

We had $150k about 8 years ago. Kept in a CD waterfall specifically for a downpayment. Saved up from living together and being DINKS.

[Anonymous]

Anonymous wrote:First time buyers who are normal do not have $100k+ for a down payment. Your typical first time buyer is putting 5-10% down. For a $500k house that's $25-30k. That's not too bad. Stories of people putting 20% down that equate to $100, 200, 300+ k are from people who got help from mommy and daddy or who built equity up.

This was us. We only had 10% as first time buyers. Sadly, no help from parents. Our home was $600K. We kept money in a savings account, as didn't have a lot at the time nor enough financial savvy to invest properly

[Anonymous]

Opened a home equity line against current home for down payment on the next one.

For our first home, we scrimped and saved. And put down 3% and paid PMI for a couple of years until we could refinance out of it.