Buying a first home - did you get the downpayment from your family?

[Anonymous]

We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

[Anonymous]

My parents gave me a couple thousand towards my first home purchase ($4000 I think). No way could they possibly give me 50-100k!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, you're making like $6k a month. You could spend $1,500 on rent each month and still have tons leftover. Where's all your money going?

I wish. It's $4500 take home after my taxes, thrift contribution (12% of salary + 8% match), life+health+dental+vision insurance. Also, I just hit this level of salary one month ago after a recent promotion. I'm also dumping a LOT ($700+ month) on student loans and didn't finish full-time grad school until I was 29. If it wasn't for grad school, I wouldn't have my very good job (got a 40% raise vs. my job before grad school).

I do have money saved up, but no way do I have $50K+ for the down payment (plus closing costs) for a mediocre condo.

Cry me a river. Six figures at 31, no dependents, and you can't save anything? Nothing?

Better get cracking to save up that $50K. You need to start somewhere.

OP here:

I'm not crying anything. I was just trying to see if my experience was typical for young, well educated professionals in DC. Think of my posting as more of a survey than a rant. I freely admit that saving up for a downpayment is hard work and requires sacrifice for most people.

That said, I went to a grad school populated by lots of wealthy students and they compose my main network here in DC. So it sometimes feels like its only me and a few other friends from middle class backgrounds who are struggling with this while all those who are buying are not having the same experience.

You are not crying, but you are whining a bit. You wrote:

How much help did you get from your family when you bought your first place? Did you ask your parents or did they come to you? I know my dad has some money, but I feel awkward asking him for a handout like that. At the same time, I feel like I'm flushing my money down the toilet by renting.

I'm having a hard time wrapping my mind around the idea of a 31yo man earning six figures asking his dad for a handout to buy his own place because he is "flushing ... money down the toilet by renting." OP, if you are flushing money away, it is not because you are renting; it is because you are spending carelessly. At your age, with that income, you should have enough savings that asking dad for a handout should not have occurred to you.

I rather doubt that you and only a few of your friends are the only 30-somethings who do not have access to family money. It may feel that way to you, but I can assure you that is not the case.

Maybe you need some new friends who can give you a reality check.

[Anonymous]

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

Seriously, this is the kind of disconnect people seem to have with wealth. You DO travel in "high end" circles if you know people who received more than 500k for a down payment from parents.

[Anonymous]

I'm 36, will probably rent for my entire life, and my parents would not give me any money if I told them I wanted to buy a house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

Seriously, this is the kind of disconnect people seem to have with wealth. You DO travel in "high end" circles if you know people who received more than 500k for a down payment from parents.

[Anonymous]

Anonymous wrote:It used to be "Illegal" to use gift money for the down-payment. The reason was that it showed to the mortgagor that you could not afford the house on your own. So if you were using parental money for any aspect of the financing, you were required to mention that in the application. If you didn't, the mortgagor could call the loan. The rule makes sense from a mortgagor's position -- they want to ensure that you are financially stable and able to make your monthly payments. I have no idea if this is still the rule, but I would think with the mortgage crisis, the rules would have been tightened even more. When we bought our first home we had a second mortgage from my parents which was specifically NOT recorded or disclosed because the mortgagor could have refused the applicatio or called the loan if it knew about it. It was a private understanding and we paid it off ASAP. Same with the down payment - I needed to demonstrate where it had come from so the mortgagor knew I was financially solid. You should, by the way, get pre-approved or pre-qualified by a bank before you start looking. Sellers love to see that you are financially set and ready to go.

You are wrong. Gifts have always been allowed for down payments, so long as you could show documentation that it was clearly a gift.

What you did, though, is commit mortgage fraud. What lenders DO NOT allow is money that you call a gift but you really owe back, because it means you have not fully disclosed to them all of your debt.

Mortgage fraud is a serious issue. The risk is not just that the lender would have "called the loan" but that you would be prosecuted, because it is actually a criminal act.

So you really shouldn't be giving advice to people on buying a house if you committed fraud to buy your house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

Seriously, this is the kind of disconnect people seem to have with wealth. You DO travel in "high end" circles if you know people who received more than 500k for a down payment from parents.

lol, pp beat me to the punch! They're not just acquaintances, but 10 good friends who received more than 500K - yes you travel in high end circles. Own it!

[Anonymous]

There is so much money and excess in this area, it is mind bending. Thing is we don't all start on the same stair. What kills me is when people don't recognize that not having student loans gets you so much further ahead of those who do. I am 40 years old and will be paying my sl until I am 52 unless something radically changes. We bought a house in 2010 for 535k with 0 down. VA loan. We could not have done it without that. Years in combat my husband served made it possible. Otherwise we would still be renting for $1350 in roslyn, 650 sq feet one bedroom condo. Check out realty usa, that's where we found the condo. We can easily make our 3k mortgage payment but homeownership would not have been possible for us without the VA loan. We also bought in S Arlington, oh the horror! I am sure some of our friends are horrified. Oh well. The sooner you recognize that in DC most people have more than you, the easier it is to move on and accept what you have.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It used to be "Illegal" to use gift money for the down-payment. The reason was that it showed to the mortgagor that you could not afford the house on your own. So if you were using parental money for any aspect of the financing, you were required to mention that in the application. If you didn't, the mortgagor could call the loan. The rule makes sense from a mortgagor's position -- they want to ensure that you are financially stable and able to make your monthly payments. I have no idea if this is still the rule, but I would think with the mortgage crisis, the rules would have been tightened even more. When we bought our first home we had a second mortgage from my parents which was specifically NOT recorded or disclosed because the mortgagor could have refused the applicatio or called the loan if it knew about it. It was a private understanding and we paid it off ASAP. Same with the down payment - I needed to demonstrate where it had come from so the mortgagor knew I was financially solid. You should, by the way, get pre-approved or pre-qualified by a bank before you start looking. Sellers love to see that you are financially set and ready to go.

A gift for a down payment is not illegal as long as it is disclosed and a gift letter is signed. What you described as having done - the second mortgage from your parents not disclosed to the lender - that was and is most definitely illegal.

This sounds right, but I still would urge OP to find out what the rules are today and make sure s/he is pre-approved/pre-qualified - which every one requires more effort (I never could keep the terms straight) - it's definitely worth it to have the paperwork done when you are looking at homes. It means you a real contender and that the deal won't be held up by a financial contingency clause.

And to the wedding poster, you are not alone. I paid for everything for my wedding, but I was financially established and "old". Drove me crazy when my parents paid for not one, but TWO full white weddings with sit down dinner and orchestra for my sister - and she was 40! Prodigal daughter here.

[Anonymous]

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

We were given $150k and we had our own $150k, which allowed us to put down about 30% on an $850k house. On our own, we would have had the 20%, but this makes the monthly payments easier. At the time we bought, DH and I were both at law firms, but now we are govt/non-profit, and can still afford our house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

Seriously, this is the kind of disconnect people seem to have with wealth. You DO travel in "high end" circles if you know people who received more than 500k for a down payment from parents.




Wow, can I have those parents? Seriously. I'm the PP who paid for her own wedding from start to finish. I'm curious. How do you find out that your friends are receiving "500K" from their parents? Isn't that sort of tacky to talk about money? I haven't even told ANYONE, not even my children about a recent inheritance due to a death. I can't imagine bragging to someone that I was receiving $500K from my parents for anything - especially when everyone is struggling so to make ends meet.

[Anonymous]

No, we got nada from either side, and I wouldn't have expected it (or wanted it!). We are all adults now and we can pay our own way! Taking $$ would have made me feel like a child, and indebted.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

Seriously, this is the kind of disconnect people seem to have with wealth. You DO travel in "high end" circles if you know people who received more than 500k for a down payment from parents.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We were given $100K by my husband's parents. We saved another $300K by living very, very frugally in a low cost of living area for 6 years and bought a 1 million dollar house here in NW DC.

I don't travel in high-end circles in NW DC but I can easily think of 10 good friends who received more than 500K for a down payment from parents/grandparents. These are just friends from church, playgroup, preschool etc---not from a high end private school or country club. Just my NW DC neighbors. It's wild how much family money there is in NW DC.

Seriously, this is the kind of disconnect people seem to have with wealth. You DO travel in "high end" circles if you know people who received more than 500k for a down payment from parents.

+1

+2