how on earth can we save a down payment?

[Anonymous]

Anonymous wrote: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.

Lesson learned, buy in a good school district

[Anonymous]

Having kids before of after buying the house isn't really the point people seem to be making. When I read the replies, what I mostly see is people saving up for a long period of time before buying their home. Sure it's easier without children, but it can be done with children, too. I think that's the advice the OP needs to takeaway from this thread. You can't just decide one day, "I want to buy a house in the DC area." For most people, it takes years of planning and saving. And that means sacrifices - whether it's forgoing fancy dinners, private oboe lessons or settling on a smaller, older home, it is what it is in DC. With or without kids, you need to cut down your expenses and save up over a period of a few years. And then you will have your downpayment.

[Anonymous]

PP here. And I should add, if you can't cut out any more expenses (or alternatively increase your income), then you cannot afford to buy a home. Not everyone can.

[Anonymous]

Don't waste your money on DC real estate. The concept of starter homes is mostly bunk and with children, you are not in a position to buy cheap in a risky neighborhood hoping to strike it rich in a few years. And you will be forever chasing a dangling carrot if you try to save for
for a home outright in one of the top neighborhoods. Focus on finding jobs out of state. You will probably find a nicer home for less money with an increased quality of life.

[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.

I'm the first PP that seems to have been quoted a lot. As I said, saving up for the down payment was PART of the reason that we delayed having kids. We also had an issue that one of us had significant health issues that needed to be addressed before we were ready to be parents. We needed to devote our time and energy to getting the health issues stabilized as much as possible. Raising infants/toddlers while handling an acute health issue that required multiple surgeries for one of the parents was not possible. But we used the time that we were forced to wait for having children to save up and plan for the house that we wanted. We didn't lose 9 years we could have had with our children because we wouldn't have been able to have children during those years anyway. But we made the decision to use the time that we had to save for the down payment for the house we wanted to raise our children in.

[Anonymous]

OP here....this made me feel as hopeless as I thought I should be feeling. Great.

[Anonymous]

Anonymous wrote:We put 5% down, not $60k-$80k. And we took a TSP loan and a Roth IRA withdrawal to pay the down payment, fees, closing costs, etc.

No family help. Lots of student loans (two lawyers). Our PITI payment is the same as what we were paying to rent.

We did exactly this too. We bought a foreclosure, which also meant we were buying below market (luckily it was a flip and didn't need repairs). We refinanced a year later to get rid of PMI, since the value of the house had gone up.

[Anonymous]

For those people who didn't put 20% down, how did you get your financing?

[Anonymous]

The issue with real estate is that it keeps spiraling upward (at least in the long term) and it you don't jump in at some point you just get passed by and priced out.

[Anonymous]

Anonymous wrote:OP here....this made me feel as hopeless as I thought I should be feeling. Great.

Why, because we all told you that we'd done it by making short-term sacrifices and saving up downpayments, and that you could do the same?

That's not hopeless. You're either lazy or short-sighted if you can't make sacrifices to save for a home. And if you are, sorry, a home is not an entitlement.

[Anonymous]

Anonymous wrote:OP here....this made me feel as hopeless as I thought I should be feeling. Great.

Just because you want to buy a house doesn't mean you will ever be able to afford it. It just might not happen. Focus on what you can do, rent a reasonable place, and perhaps look for work outside of the DC area where you will be more likely to achieve your goal

[Anonymous]

Other than cutting everything, you wont be able to do it. Why didnt you buy before you had kids? We purchased right before we were married and we did fine. We bought when the housing market was nearing its peak. Better to own than throw money away on a rental.

You might want to move to a less pricey area.

[Anonymous]

My fiance just bought a condo in DC (20016) after saving for a year. We have 2 children and fit fine in 888 sq feet condo.
We are hoping to buy a bigger place in 6-10 years.
Why not buy smaller pace? Put down 5% at least. FHA is a rip-off.

[Anonymous]

Anonymous wrote:My fiance just bought a condo in DC (20016) after saving for a year. We have 2 children and fit fine in 888 sq feet condo.
We are hoping to buy a bigger place in 6-10 years.
Why not buy smaller pace? Put down 5% at least. FHA is a rip-off.

Wow. That's a small condo for 4 people. I will stop complaining about my little house now.

[Anonymous]

We purchased our own home. We make similar amounts and lived off one income and saved the other for 3 years. We made 60k each then and saved 130k for a downpayment in 3 years. It was hard, but not impossible. We had no car or student loans. We still live off one income even though we make a little more now.