Reply to Buyers can't have it both ways

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[quote=Anonymous][quote=Anonymous]Just the perspective from the other side. I'm an older millennial who bought my first house a couple years ago, and just about all my friends have bought their first home in the last 8-10 years.

We put 17% down because we saved aggressively for years. It's the most any of my friends in the DC area have put down, by far. Most are putting down 3, 4, 5%. I have one friend who literally put a half a percent down. DC closing costs are high - just saving enough to cover that is a lot. (Only one of my friends had monetary help from family). We're saving everything we've got to get enough to cover closing costs and a bit of money down. Waiting and saving more doesn't make sense - homes get more expensive faster than you can save.

If you've struggled to put together $50k for closing costs and a small downpayment, plus you need to have savings in case you have a major repair needed in the first couple of years, you don't have $25k to fix up the house! You just don't.

Let's put real numbers on this - your budget is $600k. You can buy House A at the top of your budget that's turnkey, or you can buy House B for $550k that requires $25k of work. You've got a 5% downpayment ($30k) plus closing costs, and you've got a $30k emergency fund. Let's assume 7.5% interest rate.

If you buy House A, your monthly mortgage is $3,986. If you buy House B, your monthly mortgage payment is $3,636. Yeah, House B is going to save you $350 a month. And it's a better financial move in the long run. But if you go that way, you're going to nearly wipe out your emergency fund on house improvements day 1.

So yeah, if you can afford the extra $350 a month, you buy House A. It's a lot easier to come up with $350 a month than it is to come up with $25k, especially when you're still toward the beginning of your career. [/quote]

But the issue is that there are very few House As on the market so House B is your only option and you won’t buy it because you’re scared of paint. [/quote]

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