how on earth can we save a down payment?

[Anonymous]

We lived in a crappyish 1 BR for 3 years and were able to save 1500/month. That gave us our down payment, plus a little money I had saved before getting married. (We had a super cheap wedding, BTW.) Although we qualified for a larger loan, we refused to borrow any more than would allow us to make a 20% down payment. We live outside the beltway and have a nice (older) house and a huge yard. Husband has a 30 minute commute to Bethesda and I have a 40 minute commute to DC. We bought 2 years ago. Our HHI is 140,000. We live pretty simply, but can afford extras every now and then. Out mortgage is 1500 and daycare (in-home) is 900/month.

[Anonymous]

Zero down, save while you live in the house

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sorry, it's hard. We saved significantly before we had kids and we bought the house that we wanted to raise kids in. It would have been much harder to save enough after kids. But this is part of why we didn't have kids until 9 years after we got married.

But some good ideas. I work a full-time job, but I have a second job that I work weekly that gives me about $3000 per year. Before kids, that money went to the house fund. Now, after kids, some of that money goes to a splurge of a monthly housecleaning service that helps keep us from being completely exhausted and the rest goes into a fund for when our 9 year old car dies (I'm hoping it will make it to 15 years, and it seems to be in great shape now, so possible). Picking up a part-time job, even if only seasonal is a good idea to help create a house fund.

That's great, but that's 9 years you lose with your kids. 9 years you lose with your future grandchildren. Waiting to have kids is a pretty big sacrifice for a material object. I personally don't think it's worth it.

Well, enjoy living with your kids in an apartment, then.

You can't have your cake and eat it, too, honey.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Making drastic changes in lifestyle to buy a home is a difficult adjustment to make. But it can be done. My next door neighbors were "boat people" who all pooled their resources, lived with relatives, worked 80+ hours a week and in a year paid cash for their first home in Annandale. Now they all have their own homes (never borrowed for any of them).
Part of the problem in American culture is the shaming that goes on when someone lives in a group home, or in their parent's basement, driving a crappy car, etc.

the only shaming i see here are of those who drive luxury cars.
also, americans are much more mobile than people, and few employed people live close enough to their parents or relatives to be able to live together.
from your account it still sounds like "boat people" bought their real estate way before bubble.

OP,

to answer your question, we saved for downpayment because we lived in low COL for several years previously, without kids. however, we didn't put anywhere close to all our savings into the downpayment. we bought in baltimore, and are paying off our 15 year mortgage comfortably while living in a very beautiful place. the commute for us works much better, too. if this could work at all for you, i recommend you consider it.

Boat people came to the DC area as refugees during/after the Vietnam war. I don't think you can compare the housing purchasing opportunities of the 70s with the economic realities of today. After all, my parents bought their 2000 sq ft home with 2 acres in the 70s for $60K. With just inflation, their house would be $300K, but it's over a million thanks to the crazy housing market of the past decade. $300K is well within most professionals' reach. Over a mil is not. Sorry, but other than having a good work ethic and saving plan, there's not much to learn from boat people or anyone else who bought in 40 years ago.

[Anonymous]

For us: bought in 2006 with very little down when they were still letting you take out a HELOC as a second loan without imposing PMI. We bought near the top of the market, the house was kind of a dump and cost less than $500k, and the Zillow value of the property pretty much tanked within a year of buying. When the market crashed, we were kind of stuck but also not in a hurry to get out because we had to live somewhere, right? And the kids were so young school didn't matter yet. We were paranoid about the outstanding balance of the HELOC putting us underwater, so we applied every cent of our would-be savings to paying it down. I wouldn't say we made lots of sacrifices to make it happen, but we also weren't out buying any big ticket items - like I said, we were kind of freaked out by having this huge HELOC and no equity. We made smart upgrades over time and when we finally sold in 2014, we had been paying down the HELOC, the house looked great and at closing we got a big enough check to support a 20% down payment on a decent house in an excellent school district. I place very little importance on how nice a house is if it's at least livable and safe, but owning a property in a stable and well-regarded school district where we can now hunker down for the next decade or two feels good. When the kids turn 5, that can really change the way you view what you do and do not have in a house. Just buying to buy was the mistake we made. We didn't actually need a house when we bought in 2006, and if we could have seen the direction things were going, we could easily have done better just renting. That said, it left a very big impression on us being stuck with more debt than we were comfortable with. I'm not sure we would have saved as much if we had not been stricken with horror that we had bought with almost zero down and the implications it had in a down market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry, it's hard. We saved significantly before we had kids and we bought the house that we wanted to raise kids in. It would have been much harder to save enough after kids. But this is part of why we didn't have kids until 9 years after we got married.

But some good ideas. I work a full-time job, but I have a second job that I work weekly that gives me about $3000 per year. Before kids, that money went to the house fund. Now, after kids, some of that money goes to a splurge of a monthly housecleaning service that helps keep us from being completely exhausted and the rest goes into a fund for when our 9 year old car dies (I'm hoping it will make it to 15 years, and it seems to be in great shape now, so possible). Picking up a part-time job, even if only seasonal is a good idea to help create a house fund.

That's great, but that's 9 years you lose with your kids. 9 years you lose with your future grandchildren. Waiting to have kids is a pretty big sacrifice for a material object. I personally don't think it's worth it.

Well, enjoy living with your kids in an apartment, then.

You can't have your cake and eat it, too, honey.

We had a house before we had kids, but whatever. I'm just saying I wouldn't wait 9 years just to be able to have a house I own (you can rent houses, too). I'd rather have 9 years with my kids than a mortgage.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:oh lordy these threads depress me. you guys really went three years without traveling or going to the movies?

i am not criticizing (obviously!). you've got your shit together way more than i do. i just think i would be miserable giving up life's modest pleasures for years at a time, to buy a house around here.

sign me, grasshopper

Not everyone makes $100k+ a year or has family to give them $ for a down payment.

You need to get out more.

I think you misread the pp. I believe pp was commending the efforts noted to save money and is dreading the prospect of doing it him/herself.

i'm the grasshopper - and yes, i was commending the efforts. i get out plenty, thanks - which is why i'm a renter 4 life.

[Anonymous]

Haven't read through all the responses but the way we were able to buy our home in Alexandria for cash was buy small, sell at the right time, and trade up. All profits went to a new house. Bought a condo, lived in it for 13 years and made $180K, and so on and so forth. Saving also will help, but real estate is an investment and you have to be smart on what and where to buy, including the school district. This area is particularly tough because of the high COL, so I sympathize with you.

[Anonymous]

It was one of the hardest things we ever did. And even then we put 5% down, got a crappy loan, and then refinanced.

[Anonymous]

I think DCUM budgeting replies really tend to focus on in the smaller expenses and miss the big items. $1900 for a 2 bedroom, right? Well you can get a 2 bedroom for $1400 in Alexandria and parts of MD. So that''s $500 right there. Also, childcare is cheaper out there. Is the 2k/month for 1 kid or 2? If it's for 1, you can definitely find a significantly cheaper options once you leave the district.

Working further down to the smaller items - what is this $625 in tuition aside from childcare? Are you still in school? Your husband? That's a lot and if you're currently pursuing another degree and you think that's worthwhile, then realize that means buying a house will be put off because one of you is still a student.

The only small item that really stood out to me is your cell bill. $260/month is a ton of money to spend on two phones. Check out T-Mobile. They'll pay your cancelation fees under certain circumstances.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hmm, all the talk of not having children until later and saving like crazy from early on is irrelevant to OP. She cannot undo it nor change some other stuff that's already done (cc debts, income tax repayments).
So, from what I see - only place OP can really shave things off - cable and phone. The rest is hard to change now.
OP, stick to the budget and just hang in here: childcare costs are not forever, it will end soon, so do your debt repayments (hopefully); you'll have a bit more cash on hand to save for down payment (and you can only have 5% to start with). Good luck!

It may be irrelevant to OP's situation, but it's relevant to the question.

OP asked:

Is there anyone with children, that works full time, that bought a home in this area without employer or family support, that didn't leverage previously owned property, or can into some unexpected money?

And my answer was yes. We scrimped and saved and had kids later. That's how people do it. If you didn't, fine, but don't gripe about "everyone else having family money" because that wasn't the case for many of us.

NP here. Not that simple. DH and I did scrimp and save, paid off all my student loans and lived very, very frugally for some years and we were able to buy a condo with a significant DP. Did everything "right" except we bought in '06, a very small condo and considered it a "starter" home. Back then it was "buy now or you'll be priced out forever" and even my dad thought it was a great investment. Yeah, I know, hindsight...

We thought we'd be fine even at very modest appreciation. We went ahead and had a baby in '07, another in '10. It became apparent in 2010 that living in a tiny 1 BR condo with 2 kids was not going to work for very long without making mommy crazy. Long story short, we moved in with my parents to make it easier to sell the condo, but even with money we saved to bring to the table at closing, it was not nearly enough. Continued making payments for 2 years after we'd moved out. Listed for a year with no offers, finally gave up and threw in the towel (keeping it as a rental did not work financially) and now in 2014 our credit has recovered - but we are never going to get our DP back, and now with 2 kids, it's a LOT harder.

When I think about how we'd lived to save money so quickly, and the way things would have been for us without the crisis, or if we'd just timed things a little differently, it makes me sad. DH and I would have been better off jetting to the Bahamas than throwing it away like we did.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry, it's hard. We saved significantly before we had kids and we bought the house that we wanted to raise kids in. It would have been much harder to save enough after kids. But this is part of why we didn't have kids until 9 years after we got married.

But some good ideas. I work a full-time job, but I have a second job that I work weekly that gives me about $3000 per year. Before kids, that money went to the house fund. Now, after kids, some of that money goes to a splurge of a monthly housecleaning service that helps keep us from being completely exhausted and the rest goes into a fund for when our 9 year old car dies (I'm hoping it will make it to 15 years, and it seems to be in great shape now, so possible). Picking up a part-time job, even if only seasonal is a good idea to help create a house fund.

That's great, but that's 9 years you lose with your kids. 9 years you lose with your future grandchildren. Waiting to have kids is a pretty big sacrifice for a material object. I personally don't think it's worth it.

Well, enjoy living with your kids in an apartment, then.

You can't have your cake and eat it, too, honey.

We had a house before we had kids, but whatever. I'm just saying I wouldn't wait 9 years just to be able to have a house I own (you can rent houses, too). I'd rather have 9 years with my kids than a mortgage.

Well, I don't know how you are helping the OP with your advice of basically "Invent a time machine and buy a house before you had kids, like me!" or "Just rent a house forever, I guess"

I'd rather do what many PPs recommended, since OP ALREADY HAS KIDS, and trim the fat out of her budget so that she can rent for as little time as possible and enjoy both her kids and a home she owns, since that is want she wants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hmm, all the talk of not having children until later and saving like crazy from early on is irrelevant to OP. She cannot undo it nor change some other stuff that's already done (cc debts, income tax repayments).
So, from what I see - only place OP can really shave things off - cable and phone. The rest is hard to change now.
OP, stick to the budget and just hang in here: childcare costs are not forever, it will end soon, so do your debt repayments (hopefully); you'll have a bit more cash on hand to save for down payment (and you can only have 5% to start with). Good luck!

It may be irrelevant to OP's situation, but it's relevant to the question.

OP asked:

Is there anyone with children, that works full time, that bought a home in this area without employer or family support, that didn't leverage previously owned property, or can into some unexpected money?

And my answer was yes. We scrimped and saved and had kids later. That's how people do it. If you didn't, fine, but don't gripe about "everyone else having family money" because that wasn't the case for many of us.

NP here. Not that simple. DH and I did scrimp and save, paid off all my student loans and lived very, very frugally for some years and we were able to buy a condo with a significant DP. Did everything "right" except we bought in '06, a very small condo and considered it a "starter" home. Back then it was "buy now or you'll be priced out forever" and even my dad thought it was a great investment. Yeah, I know, hindsight...

We thought we'd be fine even at very modest appreciation. We went ahead and had a baby in '07, another in '10. It became apparent in 2010 that living in a tiny 1 BR condo with 2 kids was not going to work for very long without making mommy crazy. Long story short, we moved in with my parents to make it easier to sell the condo, but even with money we saved to bring to the table at closing, it was not nearly enough. Continued making payments for 2 years after we'd moved out. Listed for a year with no offers, finally gave up and threw in the towel (keeping it as a rental did not work financially) and now in 2014 our credit has recovered - but we are never going to get our DP back, and now with 2 kids, it's a LOT harder.

When I think about how we'd lived to save money so quickly, and the way things would have been for us without the crisis, or if we'd just timed things a little differently, it makes me sad. DH and I would have been better off jetting to the Bahamas than throwing it away like we did.

Yep, timing sucks. When I think of DH and my older friends (like in their early 40s) and how EASY they had it -- buying starter homes for starter prices, having huge DPs thanks to ever-increasing sales prices, etc -- it's a little infuriating.

But, que sera, sera, right? The only thing we could do was bow out until 2011, and save like madmen. Honestly, in 2006 (when we both finished our grad degrees and had real jobs, a natural time to buy a starter home) we were basically like, "well, if we're priced out forever, but our mortgage for 1000 sq ft would be $2500/month and our rent is $1000/month, is that so bad?" It ended up being a good strategy, but again -- we could have been the ones stuck waiting outside forever while you came out smelling like roses. Just goes to show a lot of what people credit to good decisions or "hard work" is just luck, and generational luck is the hardest to get people to admit -- don't even get me started on boomers who complain about millenials

I feel for you guys. Hopefully since your parents are local, you can either move back in with them or you can use them as cheap/free childcare for a few years to build your DP back up? I know that's what I would do if my parents weren't several hours away (my sister literally pays nothing for childcare, whereas it's basically a second mortgage for us!).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hmm, all the talk of not having children until later and saving like crazy from early on is irrelevant to OP. She cannot undo it nor change some other stuff that's already done (cc debts, income tax repayments).
So, from what I see - only place OP can really shave things off - cable and phone. The rest is hard to change now.
OP, stick to the budget and just hang in here: childcare costs are not forever, it will end soon, so do your debt repayments (hopefully); you'll have a bit more cash on hand to save for down payment (and you can only have 5% to start with). Good luck!

It may be irrelevant to OP's situation, but it's relevant to the question.

OP asked:

Is there anyone with children, that works full time, that bought a home in this area without employer or family support, that didn't leverage previously owned property, or can into some unexpected money?

And my answer was yes. We scrimped and saved and had kids later. That's how people do it. If you didn't, fine, but don't gripe about "everyone else having family money" because that wasn't the case for many of us.

NP here. Not that simple. DH and I did scrimp and save, paid off all my student loans and lived very, very frugally for some years and we were able to buy a condo with a significant DP. Did everything "right" except we bought in '06, a very small condo and considered it a "starter" home. Back then it was "buy now or you'll be priced out forever" and even my dad thought it was a great investment. Yeah, I know, hindsight...

We thought we'd be fine even at very modest appreciation. We went ahead and had a baby in '07, another in '10. It became apparent in 2010 that living in a tiny 1 BR condo with 2 kids was not going to work for very long without making mommy crazy. Long story short, we moved in with my parents to make it easier to sell the condo, but even with money we saved to bring to the table at closing, it was not nearly enough. Continued making payments for 2 years after we'd moved out. Listed for a year with no offers, finally gave up and threw in the towel (keeping it as a rental did not work financially) and now in 2014 our credit has recovered - but we are never going to get our DP back, and now with 2 kids, it's a LOT harder.

When I think about how we'd lived to save money so quickly, and the way things would have been for us without the crisis, or if we'd just timed things a little differently, it makes me sad. DH and I would have been better off jetting to the Bahamas than throwing it away like we did.

Yep, timing sucks. When I think of DH and my older friends (like in their early 40s) and how EASY they had it -- buying starter homes for starter prices, having huge DPs thanks to ever-increasing sales prices, etc -- it's a little infuriating.

But, que sera, sera, right? The only thing we could do was bow out until 2011, and save like madmen. Honestly, in 2006 (when we both finished our grad degrees and had real jobs, a natural time to buy a starter home) we were basically like, "well, if we're priced out forever, but our mortgage for 1000 sq ft would be $2500/month and our rent is $1000/month, is that so bad?" It ended up being a good strategy, but again -- we could have been the ones stuck waiting outside forever while you came out smelling like roses. Just goes to show a lot of what people credit to good decisions or "hard work" is just luck, and generational luck is the hardest to get people to admit -- don't even get me started on boomers who complain about millenials

I feel for you guys. Hopefully since your parents are local, you can either move back in with them or you can use them as cheap/free childcare for a few years to build your DP back up? I know that's what I would do if my parents weren't several hours away (my sister literally pays nothing for childcare, whereas it's basically a second mortgage for us!).

P.S. I should add we ended up having our kids in a tiny 1-bedroom for a couple of years before we could finally afford a house (through luck since 2011 was a weird year, and because we'd finally saved up 20%, which seemed to be the minimum anyone would let you put down at the time). So, while I feel for OP, too, I think having a huge rental house isn't exactly making the sacrifices most of us had to make to buy an actual house in this area (granted, our house is tiny, though!).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hmm, all the talk of not having children until later and saving like crazy from early on is irrelevant to OP. She cannot undo it nor change some other stuff that's already done (cc debts, income tax repayments).
So, from what I see - only place OP can really shave things off - cable and phone. The rest is hard to change now.
OP, stick to the budget and just hang in here: childcare costs are not forever, it will end soon, so do your debt repayments (hopefully); you'll have a bit more cash on hand to save for down payment (and you can only have 5% to start with). Good luck!

It may be irrelevant to OP's situation, but it's relevant to the question.

OP asked:

Is there anyone with children, that works full time, that bought a home in this area without employer or family support, that didn't leverage previously owned property, or can into some unexpected money?

And my answer was yes. We scrimped and saved and had kids later. That's how people do it. If you didn't, fine, but don't gripe about "everyone else having family money" because that wasn't the case for many of us.

NP here. Not that simple. DH and I did scrimp and save, paid off all my student loans and lived very, very frugally for some years and we were able to buy a condo with a significant DP. Did everything "right" except we bought in '06, a very small condo and considered it a "starter" home. Back then it was "buy now or you'll be priced out forever" and even my dad thought it was a great investment. Yeah, I know, hindsight...

We thought we'd be fine even at very modest appreciation. We went ahead and had a baby in '07, another in '10. It became apparent in 2010 that living in a tiny 1 BR condo with 2 kids was not going to work for very long without making mommy crazy. Long story short, we moved in with my parents to make it easier to sell the condo, but even with money we saved to bring to the table at closing, it was not nearly enough. Continued making payments for 2 years after we'd moved out. Listed for a year with no offers, finally gave up and threw in the towel (keeping it as a rental did not work financially) and now in 2014 our credit has recovered - but we are never going to get our DP back, and now with 2 kids, it's a LOT harder.

When I think about how we'd lived to save money so quickly, and the way things would have been for us without the crisis, or if we'd just timed things a little differently, it makes me sad. DH and I would have been better off jetting to the Bahamas than throwing it away like we did.

Yep, timing sucks. When I think of DH and my older friends (like in their early 40s) and how EASY they had it -- buying starter homes for starter prices, having huge DPs thanks to ever-increasing sales prices, etc -- it's a little infuriating.

But, que sera, sera, right? The only thing we could do was bow out until 2011, and save like madmen. Honestly, in 2006 (when we both finished our grad degrees and had real jobs, a natural time to buy a starter home) we were basically like, "well, if we're priced out forever, but our mortgage for 1000 sq ft would be $2500/month and our rent is $1000/month, is that so bad?" It ended up being a good strategy, but again -- we could have been the ones stuck waiting outside forever while you came out smelling like roses. Just goes to show a lot of what people credit to good decisions or "hard work" is just luck, and generational luck is the hardest to get people to admit -- don't even get me started on boomers who complain about millenials

I feel for you guys. Hopefully since your parents are local, you can either move back in with them or you can use them as cheap/free childcare for a few years to build your DP back up? I know that's what I would do if my parents weren't several hours away (my sister literally pays nothing for childcare, whereas it's basically a second mortgage for us!).

Nope, my parents aren't local anymore - we moved here from another state. And they're divorced now, my mom is sweet but unreliable, yada yada.
We aren't going to be able to really save at a really good clip until the kids are beyond the daycare years.
Right now, we'll be lucky to hold onto our cash.
On the bright side, I don't see the need for a SFH, so when the time comes I think we'll be OK with a fixer-upper TH. We're more than OK sending DCs to a HS that has other people besides rich white people. DH isn't handy, but I am.