Anonymous
Post 06/09/2014 03:17     Subject: how on earth can we save a down payment?
Anonymous wrote:
Anonymous wrote:First home took me till age 37 to save up required down payment (1994). Also had to pay off school loans, car, CCs, etc., before I could qualify, but once I was "in," was able to roll over to better homes over the next 20 years.

I think purchasing your own property is more important than a college education (I have an advanced degree) - at least in this area.


How so? I don't get this. Renting isn't evil; I hate that attitude.


PP I rented for 15 years before I could afford to buy. I don't think renting is "evil" I'm just saying that of all the investments that one can make, IMO, purchasing a home is so important for a number if reasons... 1) freezes the monthly amt you pay for life of loan or refinance 2) tax deduction 3) builds equity you can use for larger and larger down payments for future homes (until you are free and clear and maybe have money left over), and 4) future retirement income (rent, sell, reverse mortgage).
I hated renting so I sacrificed for 15 years so I could come up with the 10-20% down (didn't qualify for FHA). I'm just saying, I've been where you are and I hope you can save your down payment for that first financial freedom milestone.

My suggestion that it is more important that college will prob be unpopular. But college tuition is a big chunk of a first home. Then, going back to night school while you work and pay your way through college more cheaply while you live in your home is becomes another alternative to managing college prices.

Good luck OP it does suck. I thought I'd be 40 before I could reach that first challenge with savings, but it's all much more smooth sailing after that.

Anonymous
Post 06/09/2014 03:05     Subject: Re:how on earth can we save a down payment?
Anonymous wrote:Agre with the suggestion to consider relocating if nothing is tying you here. We'd be out in a heartbeat if we didn't have family nearby.


NP here. I agree with this. I would have been happy to leave this area if my family weren't here, but it is really important to me that my kid (and her possible future sibling) grow up with grandparents nearby (I didn't).

It *is* very hard to save the huge amount of money needed to buy a house, or even a townhouse, in this area. It took us six years to save up a 20% DP, plus closing costs and cash reserves, for our $620K house. This was only possible through relative austerity:

--We postponed having kids until now (expecting our first soon, in our mid/late 30s).
--We have never gone on a really big vacation together.
--We did eat out, but rarely at pricey restaurants.
--We have never had cable, almost never go to movies or performances, and never ever go to bars.
--My husband drives an elderly hand-me-down car. Mine is newer but also paid off.
--I work at home so do not have commuting costs.
--We bought almost nothing for the homes we lived in before this one, instead using inexpensive furniture, etc., from our single days.
--We contributed very, very little to retirement in the last few years (stupid, maybe, but necessary to meet the goal of buying a house).

Ways in which we were fortunate:

--Neither of us have student loans.
--We did not have any super-expensive crises during those six years.

But:

--We lost $30K on the sale of the condo my husband bought before the financial crisis. It lost value every year we were there, but for various reasons we could not sell before we did.

We had no direct family help (by "direct" I mean loans or gifts to help with the down payment; it was a big help that my parents paid for my undergrad, so no student loans). We obviously had no equity from a prior sale. Our income is very average for the area. It was just a combination of being really boring and cheap and being somewhat lucky.

If after cutting what expenses you can and taking a hard look at your likely financial future, you really don't think you'll be able to buy here, I'd suggest thinking about relocating if that's something you think you can do.
Anonymous
Post 06/09/2014 02:30     Subject: Re:how on earth can we save a down payment?
Anonymous wrote:How do you use those phones that are talk/text only when you work full time and need to be able to answer emails remotely?


I use my iPad mini. $20 a month for 1G LTE.
Anonymous
Post 06/09/2014 02:24     Subject: Re:how on earth can we save a down payment?
Anonymous wrote:How do you use those phones that are talk/text only when you work full time and need to be able to answer emails remotely?


T-Mobile family plan (unlmited everythgin, including data) is $50/month for the first person, $30 for the second = $80/month + taxes/fees for 2 people (so I guess about $90-100 total). That doesnt' include the cost for the phone, but youcan bring your current phone or get one from them.
Anonymous
Post 06/09/2014 01:46     Subject: Re:how on earth can we save a down payment?
Anonymous wrote:How do you use those phones that are talk/text only when you work full time and need to be able to answer emails remotely?


I have a Smart phone through Virgin Mobile. I pay $35/month for 300 minutes talk time and unlimited text/data. You can get the same plan for $45/month with 1200 minutes or $55/month for unlimited. Even if you pay for 2 phones at unlimited talk, that's still $110 which is $150 less than what you pay.
Anonymous
Post 06/09/2014 00:36     Subject: how on earth can we save a down payment?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:First home took me till age 37 to save up required down payment (1994). Also had to pay off school loans, car, CCs, etc., before I could qualify, but once I was "in," was able to roll over to better homes over the next 20 years.

I think purchasing your own property is more important than a college education (I have an advanced degree) - at least in this area.


How so? I don't get this. Renting isn't evil; I hate that attitude.


not PP but it is so because with college degree it will still take you forever to actually own home. i prioritize leaving my kids property over college education. and we a two phd-s family.


What? You would rather just leave our kids property than give them an education that will allow them to earn enough money to buy their own property and meet whatever other needs they have in the future? That's insane.


Money can be earned without college education. It's insane to spend 200k on college education that kids will need decades to save again.

In any case, there is plenty of cheap decent college education around the world, no need whatsoever to pay US prices.
Anonymous
Post 06/08/2014 22:31     Subject: how on earth can we save a down payment?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
$2,000 Daycare
$1,995 Rent
$800 Groceries
$625 Tuition
$250 Credit Card payment
$317 Auto Payment
$325 Utilities
$265 Gas & Fuel
$260 Mobile Phone
$200 Federal Tax Repayment
$221 Student Loans
$125 IRA Savings Account
$126 Television and Cable
$95 Auto Insurance
$82 Life Insurance
$57 Fees & Charges etc.

Our monthly income is $7,500 combined.


There is a lot of fat to cut here:

your groceries are too high. Stop buying so many convenience foods. +200 /mo
pay off the credit cards +250/mo
dump the smart phones or get the minimum plans (my iphone is $68mo) +150/mo
pay your damn taxes +200/mo
ditch cable and use rabbit ears +netflix +100/mo
(think about ditching life insurance)

total: +900/mo; $10,800/yr
Anonymous
Post 06/08/2014 21:33     Subject: Re:how on earth can we save a down payment?
Agre with the suggestion to consider relocating if nothing is tying you here. We'd be out in a heartbeat if we didn't have family nearby.
Anonymous
Post 06/08/2014 20:48     Subject: Re:how on earth can we save a down payment?
Anonymous wrote:How do you use those phones that are talk/text only when you work full time and need to be able to answer emails remotely?


I work full-time but do not need to be able to answer emails at a moment's notice. I can answer them from a laptop at home.

I have a talk/text/data plan from TMobile for $30/month.
Anonymous
Post 06/08/2014 20:36     Subject: how on earth can we save a down payment?
When will your car be paid off? What about walking/ biking more? Gas bill seems very high.
Anonymous
Post 06/08/2014 19:32     Subject: how on earth can we save a down payment?
Yes, I think in your situation with the place in life you are at now, it's going to be really tough. I have friends who bought back after the crash with FHA with little to no down that were just lucky that they were in the market to buy when they did. Their same offer today wouldn't even be considered if there were other offers on the table.

I think you either be content with renting for now until your income can go up or, honestly, think about moving from this area. It is not worth depriving yourself for years to save for a down payment.

We all need to wake up in this area and realize how silly all of this is. We work so hard just to meet the minimum financial obligations such as housing and daycare. Meanwhile, in plenty of other parts of the country, people on any kind of decent salary can easily do both. It's so messed up here.
Anonymous
Post 06/08/2014 19:03     Subject: Re:how on earth can we save a down payment?
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.



This. DH saved a significant amount of cash including from his early 20s. We got no help from family; however, we are both professionals w/ pretty decent salaries.

We were married at 32 and then bought a house at 34. We bought the house we would raise our family in (n. arlington) b/c we realized that we had already missed the boat on getting a starter house and then trying to roll that over into a bigger house (once you factored in closing costs).

Even so, it would have been a challenge to save the amount we did w/ childcare costs (we have a nanny) for two kids. We did not have kids until 3 1/2 yrs later at 38, but that wasn't b/c of the house. We, rather, I was not ready before then to start thinking of raising a family.

If you do the math, depending on where you live, it may not be worth it to buy a house. I have a friend who talks about the tax deduction but unless you buy a really expensive house, he's not getting much more than the standard deduction. Also, he's not really calculating all the additional costs of home ownership (property taxes, increased utilities, shoveling, gutters, lawn care, buying new air conditioner).
Anonymous
Post 06/08/2014 18:45     Subject: how on earth can we save a down payment?
Anonymous wrote:
Anonymous wrote:$2,000 Daycare
$1,995 Rent
$800 Groceries
$625 Tuition
$250 Credit Card payment
$317 Auto Payment
$325 Utilities
$265 Gas & Fuel
$260 Mobile Phone
$200 Federal Tax Repayment
$221 Student Loans
$125 IRA Savings Account
$126 Television and Cable
$95 Auto Insurance
$82 Life Insurance
$57 Fees & Charges etc.

Our monthly income is $7,500 combined.


$325 seems very high for utilities. Our 3br house is only about $40 in gas and $120 electric (flips in the winter). Do you have to pay for water?


We live in an old house which wastes a TON of energy. The landlord told us the complete opposite before we moved in. Now we are stuck for one year. We pay for everything: trash removal, water, heat, A/C, power, and so on....
Anonymous
Post 06/08/2014 18:43     Subject: Re:how on earth can we save a down payment?
How do you use those phones that are talk/text only when you work full time and need to be able to answer emails remotely?
Anonymous
Post 06/08/2014 15:35     Subject: how on earth can we save a down payment?
This. Cut your groceries to $125 a week or less. Shop at Aldi. Eat less meat. But you have a ways to go. Can you move to a cheaper apartment?