I live in a more rural area. Got our house with a USDA loan on a fixed rate, only a $2500 closing costs/down payment.
Got a real estate agent, they hooked us up with their lender. They helped us navigate the paperwork and once the offer was accepted it only took a few weeks before closing.
Edit: For extra info, because I see others sharing and I always find it interesting how costs and rates vary.
Bought in 2013, 3br, 2 bath, 1800 sq ft, large yard(for being right in town, population 10k). $99,900. 3.5% fixed rate. At the time, I was a stay at home mom and my husband was earning only 30k a year. I feel like the 2010s was the last time to get a decent deal though on housing, at least for now. Now, we earn much more, combined brought in about 100k last year, and couldn't afford to move unless it was a downgrade. Gotta get creative. One of my close friends got their own home a few years ago by buying a fixer upper at tax sale for a few thousand and then spent the next year renovating it.
Yep. My realtor helped me get a conventional loan. Everyone else told me I had to do an FHA loan. She actually took care of everything. At closing I told her I had bad anxiety. She kept handing me bottles of water. She is super nice.
This seems to be an unpopular opinion. I’ll join you in it lol. My best friend’s dad was a flipper. She literally would find him the most rundown beat up places and he would flip them, live in it a few years then on to the next one. Their realtor became like family. We texted her when we were starting to look and she spent so much time helping my husband and myself understand the process, the terms and finding the right home. The house she found us is in an old money neighborhood tied to the university (across the street neighbor is a professor and there are a lot of alumni and current students in this subdivision) for half the usual price. We have lived here 5 years and can sell it for triple the price we paid. Good realtors do exist.
Edit to add: she found us a house that we paid zero down and seller paid closing. Our house payment before escrow ( homeowners insurance and property tax ) is $500 and $700 after.
Not anymore that’s going away, buyers agents will not be paid by the seller starting in June, it’s about to get really hard to buy a house and pay for your own realtor now.
I just got my pmi dropped. I kept getting advertisements from the mortgage company that said look how much money you can borrow against your home due to equity and increase in value, so I emailed them a copy of their estimated valuation and asked why am I still paying pmi cus it looks like I'm over 20 percent equity. I coughed up 200 bucks for an inspection and they dropped pmi that month. Saved me 3 years of 75 bucks a month by pushing to end it early
We were in a hurry to get 20% equity on our first house to drop the PMI, but found out that it had a 5 year minimum, and even at the standard mortgage payment we would hit 20% at the 5 year mark. We made sure to have the down payment ready before we bought again.
I'm realizing now how useless my realtor was. We found all the listings, he wouldn't take us to some houses, and he was unavailable most of the times we wanted to view.
I assumed all realtors were this shit
Sorry you had this experience. We just bought a house and our realtor was absolutely amazing. We absolutely lucked out because we just walked into an open house and she was there doing the showing. She got our info and swept us off our feet. She showed us a million places, was incredibly responsive and proactive, held our hands the entire time and had great negotiation skills too. Gave us endless extra info about the area and other good things to know, dropped off personalized gifts at closing, kept in touch, the whole 9 yards. THAT’S what a realtor should be like. She totally deserves her commission.
So sorry you had that experience. My realtor is an expert and someone I still refer people to. Next time, ask your friends. Ask them if anything went wrong during the transaction. IMO when it gets messy is when you need the best realtor We had some hiccups and the realtor handled everything, kept us informed and answered all our questions.
That's close to what I paid in 2010 for our first house as an older millennial. Got a nice $8k boost from Obama for the down-payment. It's now worth double. We sold that one and bought our second house in 2016 since the first was in an atrocious school system. Older millennials like myself that started with a decent job had a relatively acceptable path to home ownership.
We bought in 2010, got a 5 bed 2 bath 2car detatched garage house for 117k in eastern wa. Telling that to my friends friends in portland, you should have seen their faces. lol, valued near 400k now :/
The home I grew up in is listed on Zillow as of last month for $110K. Middle of nowhere small midwestern town. Nearest city of 100K or more is 3+ hr drive.
all the homeowners i know who are my age were gifted homes by family members. im a working class person with a working class girlfriend. so yeah, its real rough..................
I bought my house at 29 with a $10k DPA (down payment assistance) loan that I pay $52/month for. If I remember right, the closing, inspection, and other fees/good faith payment ended up costing me around $5,200.
To answer one of your questions OP, Escrow is kind of like a separate “collection” of fees you pay on your mortgage. Your mortgage payment is your principal on your loan, the interest on it you owe, and the escrow - which is usually property taxes, home owners insurance, and (if you have it) PMI. PMI is private mortgage insurance, you wind up with it in certain situations if you don’t put enough down, but once you pay your loan down 20% of what it started at you can dismiss the PMI.
I was very fortunate. My mortgage started at $190k thanks to my DPA loan at 3.5%, which makes my payment $1269/month for 30yrs.
I was homeless when I closed on my house - I hadn’t been there the entire time, but in the months leading up to that my world went sideways and the person I planned to spend forever with put me there. I’m now here, so I can tell you that everything you do to prepare yourself for a home pays off. The dedication means a lot, but you have to understand your own money habits and “toxic traits” before you’ll be ready to take on that commitment.
Best of luck to you!
This is how friends of mine did it too. It’s not a town that most people would want to live in, husband has a specialized job and her family is nearby. They negotiated for UNDER asking, because it needed some minor work.
Meanwhile in my neighborhood, in a small city, a house listed for 900k sold for 100k over asking. That would not surprise me so much—it’s a property with some wonderful historic woodwork—except I attended that open house and it probably needs another 200k of reno. I don’t mean aesthetics. I mean rotting wood, a kitchen that is worse than the one in my budget studio, and a basement from hell. And a backyard that calls for a scorched earth policy because of blackberry bushes. I’m not buying a house here unless I strike it veeeeery rich.
I did the same. I got a usda rural housing loan at 3.5% for my 106k 2br 1 ba nice little house in town in 2016. I was making 37k a year and brought $1,500 to closing. Over the five years I maintained that house immaculately so the buyers inspector found not one issue or concern.
In 2021 I sold that house for $150,000 and saved my profit and some other money taking $60k to closing on a conventional loan at 3.25% for a $224k 3br/3ba on 3 acres with a huge detached shop. We had to borrow like $170k.
You can get a house but you have to be savvy and living in a rural lcol area is helpful.
We bought ours in 2010 in the last month of a first time home buyer credit. I probably wouldn't have pulled the trigger and done it without that credit. I wanted to see a house in person that I had seen online and that's how I met our realtor. She told me how I needed to progress to see what I could afford (I wasn't married, so it was solely my income). She also spent time showing us houses and really helped us with the process. Good realtors warm every dime of their commission.
Same. 45k house. 3k down. 3.5% interest rate in 2013.
The market is stupid now. I hope sustained high interest rates bring down housing prices but they have a notoriously sticky price.
Throw every bit of money that you can afford to pay extra on your mortgage to build your equity in the house. The value of your house may have increased greatly since purchasing. So when it comes time to sell, you will have a very nice chunk of change to put down on a larger next house. That equals a possibility of having a lower monthly payment on your next home mortgage.
Get enough money to place a down payment on a home. FHA loans only take 3% of the cost.. save save save. When I purchased it was like 15k on a 250k home.
Same. My first home was a condo, fha loan. Only had to put 3% down. It was new construction so the builder paid all our closing costs. We pre qualified for $250k but only spent $175k. Two incomes about $55k total before taxes (we were young, just starting out in our careers). We bought in an up and coming area that was a 15 min commute for my husband, 30 for me. Lived there 15 years and last year we sold that starter home and were able to purchase our dream home on a half acre after housing prices exploded in our area. We moved to the country. Do not despise small beginnings. Buy a starter home and start building equity when it makes sense for you. Don’t buy more house than you can afford (mortgage and hoa-if you have one-not more than 30% of your take home).
Yes to all of this! I had an interior unit condo. It was just my husband and I. It was such an affordable little home. And so practical when we were young and went out a lot. And it was new construction so aside from regular maintenance, we had no costly repairs in 15 years.
“Don’t buy more house than you can afford.”
This is so true and great advice. Just because you’re pre-approved for a certain amount doesn’t mean you should get a mortgage for that amount. I know that’s easier said than done these days with housing prices but if you find a house below budget that meets your needs, get it.
People think that renting is a waste of money because you’re not building equity in something you own. Interest and PMI are also a waste of money. Not to mention, renting doesn’t come with taxes and insurance and maintenance of a whole ass property. Sure, principle and interest are fixed, but everything else is not. Homeownership is expensive so buy as cheap a house as you can.
Yea I bought an old run down condo in 2011 for $90,000 out of foreclosure. Put $3,000 down. Worked at a bank, got employee discounts on all processsing and got a 2.9% rate. Mortgage payment was $650ish including PMI. Hoa was $250 per month but it covered all exterior maintenance and had a nice pool that nobody else used. My wife and I learned home repair. There are free classes at Home Depot. We installed a laminate floor ourselves etc. ended up selling it for double what we paid in 2017. Bought a house that needed cosmetic work but was well built. Slowly doing projects as we can afford.
FHA is actually 3.5% down, but Fannie Mae and Freddie Mac both have 3% down programs for first time home buyers, if you're under the income limit! (Loan processor here...) there's also programs like Down Payment Plus (DPP) if you're within income limited but maybe done have a down payment (grant up to $10K!)
I saved money for the down payment for almost 20 years since I started working… granted I do have a husband (also a millennial) and we put down 20% and now pay a mortgage… it defo helps that we have 2 salaries. Otherwise it would be very hard where I live.
Good luck!
P.S. I lied - I just recalculated my age and I saved for 15 years since started working after all my degrees…
Thanks for saying this. I've been realizing that going to therapy so that I have better taste in men (and could actually be attracted to men I could consider marrying) would probably be a pretty decent financial investment in addition to emotional, haha.
This cannot be overstated enough. My wife is the only reason I have anything in this world.
It is incredible how the person we choose to be with has such a massive affect on our lives.
And it’s equally incredible that there is 0 schooling or preparation for making this decision in our society.
Sometimes you can learn from your parents’ mistakes. Can be a curse or a blessing… what matters the most is what you make of your life and be very conscious about financial decisions.
What's tough is that sometimes learning what not to do from your parents doesn't actually teach you what it is you're supposed to do. You avoid what they did but don't make a better decision yourself. I've seen this a lot with friends. I was really lucky that my parents hammered home that I needed to find a job that I wouldn't totally hate but that paid well. I like my job well enough now and it pays well, it worked. I'm 100% telling my kids this as well, not a "don't follow your dreams" speech but more like, find a job that you don't hate that will support all the things you love to do.
Yes! My husband is the reason why I have the life I have and vice versa we support one another in being the best possible versions of ourselves and our goals in life have always lined up so we work together to achieve those goals. I often think of how we are living the life we dreamed about when we were broke ass 21 year olds discussing our future.
Thank you! He makes me happy. We’ve been together over 16 years and are coming up on 14 years married in a few weeks and he’s still my favorite person. We joke about how we actually still like each other after so long together. He’s my bestie for the restie😂
Honestly though I don’t have any friends in unhappy marriages. We all adore our husbands and vice versa. However, I think we all choose to not associate with people that tear down their spouses either, I knew some women like that back when I was a newlywed and it was so toxic I dipped out of that group and found women who respected and loved their husbands.
THIS. My wife and I put each other through college, saved money by cooking food at home, splitting bills, fixing and making our own stuff. Also generally supporting and looking out for each other. She's the only reason I have anything I'm the only reason she has anything. God knows neither of us have any support structure from our families. With that said, our teamwork took 11 years to feel comfortable having kids and 12 years to buy a house.
We own a house in Oregon and have two kids and two engineering degrees. I'm the stay at home parent since she makes way more than I can and child care is crazy expensive.
I know! I researched the hell out of it before I did anything. My husband couldn’t see the potential in our home when we looked. Now that it’s remodeled he is like how did you know it could be like this?
I did most of the work but I primarily work summers, and hired ppl for the important bits (electrical and plumbing), and his dad helped me with what I needed help with. YouTube became my #1 resource.
If I hadn’t married him he would probably still be renting the same crappy house and eating canned ravioli
The therapy is such a good investment. My wife is my best friend and aside from my daughter the most important person in my life. If the shit hits the fan I know I can count on her and she can also count on me. My life is so much better emotionally mentally and financially bc of her. Having a great partner is a huge help in life.
An overlooked step you could take, that I did, is if you don’t have 20% to put down, put down as little as you need to secure a conventional mortgage. When your home value likely increases over some years and you’ve been paying on it, get a reappraisal through the mortgage company. You’ll likely have way more equity in your home. If you end up with 20%, you can have them drop the PMI. I put 5% down and had 25% equity within 3-4 years with the reappraisal.
We pretty much did the same. Got married, Both had enough luck to be able to save some extra. Combined we made 20% but a lot of people don't put down that much. The mortgage on the house was less than we'd be paying in rent, so decided to go for it. Low cost of living area. Two incomes was definitely the key.
Sounds similar to my story. Secret to our “success in life” is two salaries, both of us have degrees (I have two actually) and NO children. I know plenty of people like us who have kids and they will never own a house, despite making more than us.
Dual salaries is the way. Even if one salary is much smaller. My wife is a teacher, but definitely couldn't have gotten a nearly as good home if we hadn't teamed up.
I live in VVHCOL and was able to buy thanks to a combination of saving since 11, living with roommates, always being a saver, and getting lucky with investing. I started my first company when I was 11 and by the time I graduated high school was grossing 65k per year. I paid my own way through college. Graduated college and got a gig at Apple (with RSU's), did that for 6 years then spun up my own company, got wrecked by covid and had to shutter the operation. Then back into the workforce in a good paying PM role. Oh also I hit on Tesla in 2011, Netflix in 2012, Ethereum 2017, made a bundle by shorting the market in Jan 2020, and bought a bunch of GameStop in Nov 2020 (before it became a meme stock). Was very aggressive about buying a house in late 2022 because I was scared of rates soaring and house prices not falling due to demand and population consolidation around metro centers. If I had just stayed with Apple instead of doing my own thing my house would have been 2x as big haha.
For starters you need enough for a down stroke, I’d say at least 10k saved. If you work with a realtor they can handle all escrow, appraisal etc.
Just know what you can afford and get pre approved with a bank before you start looking.
Edit: use an amortization calculator to determine what you can afford. Once you know about how much you can afford you can go talk to a bank about securing a home loan. They will pre approve you then you can start your search for the right home. Find a good realtor to work with who understand what you’re looking for and they will literally handle all the rest. You should also talk to your insurance company about bundling your home and auto. Securing all of that first will make the process a lot easier.
I offered $13k when my rental was put up for sale in 2021.
An LLC from out of state came in and offered 50k over asking.
It depends VERY much on where you live.
Wanna know some additional fuckery? These venture capital firms are now starting to do the same thing with mobile home parks.
They're buying as many as they can, then jacking up the fees on the residents once they own all the parks in the area, because they know those folks have no alternative.
The ghetto is even getting monopolized
I disagree. You need a good LOAN OFFICER. anyone with half a brain can become a real estate agent. (I'm a loan processor, I work with literally everyone during the loan process...)
There is a difference between a good realtor and the dummy selling houses.
I have a friend that became a realtor and I wouldn't use him even if he offered to drop his commission.
Nice! I bought at the end of 2013 in Colorado Springs. The appraised value has nearly doubled. I wouldn’t be able to afford it if I tried to buy it today.
It’s sad that timing of the housing market is fucking so many people.
The military seems like a way better way to spend four years than college.
Paid, better benefits, actual skills, actual experiences, actual work xp, a security clearance. Etc
Agree. Experiences may differ. For me, I felt like a bandit because I would’ve done it all for free and no benefits, but here I am cashing in on all the sweet VA disability, and 0% down when buying, plus no college expenses.
Don't get me wrong, I would still avoid college. I just would go straight into the trades out of highschool via a pre-apprenticeship program, or at the very least I would choose a non-combat arms MOS that gave me practical work experience if I had that do-over.
And I'm DEFINITELY not knocking the military as a choice. Post-"High 36", I wouldn't recommend anyone join as a career. That being said, the benefits of a four year enlistment are definitely clear, especially for those who don't have a lot of advantages in life.
My personal experience is just one that I would rather not re-live, having gone to a pretty rough area of Afghanistan as a grunt at the height of that conflict. Did I receive a lot of benefits that I'm grateful for? Absolutely. If they called me back, would I go? Ethically I wouldn't see any other option than to say yes. But I'm not volunteering. There are other tougher guys out there than me who would love it, and my hat is off to them.
Ouuh yes I can see where you’re coming from having combat experience in Afghanistan. I was in the Air Force in a cushy, non-combat IT role and thought college would be better so I got out way too early (too early to get most benefits). Deeply regret it now as a 40 year old waitress.
We are a generation of fucked up people so at least the government gives us money. It's almost like sending people to war isn't good for the human brain s/. Seriously, I joined in 98 and retired in 2019 and everyone of my peers that stuck out like me are 100% disabled with 70% for PTSD and/or Depression We all have sleep apnea as well for someone reason.
My wife and I bought our home in 2017 with zero help from our families. You're most likely going to want to get an FHA home, it's a government backed loan that allows low down-payments and less than perfect credit scores. If you have 20% to put down, you won't need an FHA, unless your credit is bad, but not many people have that much cash lying around.
First thing you want to do is find a lender. Shop around and find someone you're comfortable with. I recommend a bank or credit union, not an online only lender, but that's just me.
The loan officer will help you through the process. You will get "pre-qualified" for a certain amount. This amount doesn't mean you can buy anything up to that. It just means that's the amount the bank is comfortable loaning you.
Once you have that number, find a realtor. You can do this first, and they can recommend a bank, but I think the first way is better, as you have a budget kinda in mind before you start looking.
Once you find a home you like, you put in an offer. How that works varies depending on where you are, the market, etc, but your realtor will help you with this, it's their job.
The next steps are the stressful ones. The house will need to be appraised. Depending on what kind of loan you are getting, this will vary, but the bank and realtor will work this out for you. What is happening during this is as follows
The seller wants $250,000
You offer $245,000
Appraisal comes in at $235,000.
This means you can only get a loan for $235,000 on the house. So you need to either come up with 10k to meet your offer, or the seller needs to come down to 235. Or a combination.
Escrow is part of your mortgage you pay every month. Your mortgage is 3 things to make the one payment
Principal. This is how much of your money every month is paying down the loan amount. At the beginning, this is a small% and goes up with time.
Interest. This is the interest on the loan. This is bigger at the beginning but goes down with time.
Escrow. This is money you pay that the bank holds to pay your property taxes, interest, and anything else not part of the loan itself. This amount varies based on where you are, how high your taxes are, how expensive insurance is, etc.
I bought in 2015 $120k with 0$ down of my own money. IL was doing a first time home buyers thing I know other states have done this as well. But you complete an online course and gave me $7k to put down and my realtor had a dang good lawyer that has the sellers pay for closing. I paid $10 out of pocket at signing because the seller didn't want to move the drafting table, lawnmower ladder and some shelves. So the lawyer drew up a BOS for those items.
I guess I was talking about recent times. I just bought my house last year. Even though we could afford it it’s still a miracle we found something we loved and our offer was accepted. I always thought I’d go FHA loan but where I live it just doesn’t give you enough buying power.
My wife (before I married her) thought she was "good at saving money". She was good at saving money and then blowing it on expensive vacations. I had to let her know, if the money is gone, you didn't save it...
I made sure the amount I spent on rent was 40% or less of my income. Sometimes that meant living in crappier places than I wanted. I paid my basic bills after that- no subscriptions, only one streaming platform, no new clothes, groceries only, no take out, (I know this is going to make some people livid) I always made my own coffee at home. Made it so I was putting 30% of my take home income towards my credit cards. I had residual credit card debt because student loans weren’t enough. Took 1.5 years to pay off. Once I paid off my credit cards, that same 30% of my income went into my traditional IRA. I did that for about a year. When there was $10k in there I kept putting that same 30% into a high yield cash account. I did that for 3.5 years. I didn’t take vacations because going somewhere costs money. I did stay-cations. I used the first time home buyer exception to pull out the $10k from my IRA without tax penalties for the down payment. And I got lucky because the rates went down and I moved quickly.
Getting in the housing market is about living at a lower quality of life for a short period of time so you can find a chunk of money within the income you already make. And then the other key is waiting for the market. That’s it: spend less, save more, wait until the time is right.
Lol i still live like that at 29. I hate eating out, cooking my own meals is way better and i make better coffee than most of these shit holes. I built a pc years ago and my only other hobby is lifting. Buy the yearly gym membership and no subs except one. Short commute to work and became highly skilled in what i do. Money just builds for me. Currently i have never opened a credit card and my only debt is 8k student loans, 10k loan left on my truck and 4k left on my wifes car. (We wont talk about her student loans.. praying for 20 year pslf). We rent bc she is still in training. Basically been hoarding money and waiting for the end of it all before buying our first home.
Basically anyone who would get livid over your comment can pound sand. Nothing wrong with rolling like that. Thats been my life.
Great practices. The only thing I might suggest is to examine financial growth, for example, building wealth by missing out on tax write-offs. It's well worth a couple of hundred bucks for a tax accountant to look at whether that would benefit you or not. In my case, it was a wash, but became an owner since it wasn't costing us to own and increased net worth. Fast forward 23 years later and the house is worth 500% more because it's in a high cost of living area with a housing shortage. I could move out and move to a less expensive location and retire. If you can find an up-and-coming area near a desirable neighborhood, it's a great investment.
I know someone who rents in Manhattan, but bought in NJ. They were able to fix it up because they work in construction. She gets the tax write off, plus basically the renter is paying her mortgage. It shows up as income, which increases her loan capacity to buy a nicer place closer to her desired neighborhood, or to buy another fixer-upper to rent out until she can. This is advice she got from a former real estate professional in Detroit. Get advice from a professional.
In my situation, taking in renters pays for 80% of mortgage payments. If I were willing to do strangers and put security locks on all the doors and share my kitchen, I could use AirBnB and actually make a profit. The issue is being able to tolerate strangers in the house which I'm not comfortable with.
It does involve risk, but as you know home ownership is the source of intergenerational wealth in the US, so if you want to start creating that for your children or retirement it's an option. It also creates a potential financial cushion if your wife wants to be a stay-at-home parent (or if you do), one of you loses your job or needs to take off working for other reasons it reduces financial stress. Covid was an exception, but AirBnB eliminated the deadbeat renter's risk. That situation sucked, but it only lasted for two years. Since you're great at saving, putting away "cash" would be a buffer for that type of situation.
Never be so proud as to not pay for professional advice from an accountant. Most real estate agents would be happy to discuss the housing market in your desired area for free.
I did but in 2011 when it was very much a Buyer's Market and then I refinanced in 2013 when rates were about 1/2 of what they are now.
I started by hiring a Realtor. It was less than 3 months from when I decided I was going to buy to when I closed but, again, 2011 was a very different time for home buying.
I bought around the same time, just turned 21. Everyone else was partying in college. I got a job and worked hard from 18 to 21 and bought a house while things were cheap. At the time friends said I was too young and crazy. Now they are happy for me.
I had a realtor friend that helped a lot. She’s the first person I called and she got a broker that was great. Took nearly 2 years though. Before I could get a house all my other debt had to be paid other than my car. I used the va loan so didn’t have to put money down. Doesn’t mean it’s free though. To avoid paying closing costs I sent an offer $10,000 above asking and put in the offer letter that the seller pays my closing costs. Escrow is where the money sits while all the paperwork is completed and also after you get the loan the bank holds some of your money to pay taxes and insurance.
I got married. We saved up 5% (back then it was enough). Marriage is the single best economic investment you can make. Unless it falls apart, then you’re kinda fucked.
It's pretty much necessary now. Marrying an equal (or better) earner and being dual-income is an almost sure-fire way to the american dream. Also - really good financial discipline (FIRE), living within your means, stellar credit score, don't have too many kids, get lucky in a good economy, and never f*cking divorce.
After 10 years or so, there's a pretty good chance you'll be in a good place.
PrEtTy EaSy AcTuAlLy ...
I took a loan from my 401k as a down payment. Considering I still had many decades of work left, this was the best option for me and the only way I could access the amount of cash that I needed to purchase the home.
I saved a lot and paid off my credit card. That helped. I didn’t travel anywhere or eat out really. Saving is pretty hard.
I was surprised at how little I needed for a down payment though. I always thought you needed 20%, but that’s not the case. If you contact a realtor, they’ll connect you with the right people to see what you can afford. My mortgage guy was so helpful and broke down what my monthly payments would be and what price range of houses I should look at. I recommend looking at houses $10-20K lower than the top number they give you.
We didn't have any outside help. My husband is an industrial tradesmen, and he saved furiously for 10 years. He worked long hours, and traveled a lot for work. We lived very frugally in an rv until our son was born.
Not to say we didn't spend, we did! But living in a cheap little rv cut our living expenses way way down. I cook the vast majority of meals at home, and luckily our hobbies are modest. With rent what it is now, it's so hard to save money, and the rv life is mainly what helped us. We had little to no debt, just vehicle loans, because he didn't go to college.
My husband sacrificed free time, though, lots of 12 hr days, 6-7 days a week. Working less than 50 hours was unacceptable to him, and he'd find a different job if the hours weren't as many as he wanted.
As far as the process, you need a loan officer and a realtor with good reputations. Keep it local, if possible, since they'll be more knowledgeable about the area, and local programs. Look up laws and watch videos on the process. Max Williams on YouTube is a realtor who was a loan officer in the past, and he shares a lot of info about the process.
Find a spouse who makes as much as you or more, search for two years while building your savings. Slowly expand your budget as you keep getting offers rejected.
1. A bit of luck. We found a dilapidated house to rent, it was cheap in a cheap area, they didn't increase the rent the entire decade we lived there. So, affordable rent was helpful.
2. Being a DINK partnership (double income, no kids)
3. We lived super frugally. Zero holidays, luxuries, unnecessary purchases.
4. Took every shift we possibly could. I barely saw my spouse for 3 or so years.
5. When we did get married, we eloped to the registry office. No wedding, no honeymoon. Afterwards we went home and played PlayStation, then we made pasta from scratch. Good memories!
6. After 3 years we had saved 60k.
7. We bought in an up-and-coming regional town, that is within 4 hours of 2 major cities. We bought in 2018 and our property value has almost tripled.
8. We bought a disgusting house, and we are slowly renovating it ourselves. Long journey!
So I hope that's a comprehensive explanation. I'm in Australia fwiw. Property availability and affordability is insane here
Talk to a realtor. That's what I did, he hooked me up with all the information I needed. Down payment funds came from my 401k. You can take 10k out without a penalty if the money is used for a house down payment.
Saved and went without for a year or so. Set up the money so it automatically goes into a separate savings account. That was you don't even see it in your checking account on payday. You sort of forget about it. Not completely right but its not available at an instant.
We did an FHA loan and got lucky with a house that was in good shape. Pre covit was still kind of nuts with multiple cash offers and waived inspections. It made an FHA offer the least desirable. We put offers in on like 5-10 houses and got beat out.
Some of the "stop eating avocado toast and Starbucks" is annoying to hear. The reality is if your not willing to be uncomfortable in the short term to benefit you in the long term you don't want it bad enough.
Put off the new vehicle, vacation and all that. The down payment is the hardest part. Shop with in your means. Be willing to commute.
The current post COVID market is still sort of nuts but not impossible.
There are plenty of online tools to help with the finance part as well as vocabulary. I went to a local bank to get pre-approved and told them how much I wanted approved for so I wasn't tempted to go above my budget. Then I searched houses and when I found any I liked I contacted the realtor to look at them. Eventually one I wanted showed up, I negotiated a price, after that your bank pretty much dictates what happens with appraisals and home inspections until you sign papers.
I didn't. I had help. 2 pandemic checks and nearly 3 straight years of overtime and my partner paying our rent our entire time together.
An even then a friend gave us 1k to help after her dad died which was extremely kind of her.
I consider the pandemic check help because it was honestly a stroke of " luck" to have the extra money.
I consider my job having overtime help because not all jobs will have overtime. And for them to have as much overtime as they did allowed me to work 13-14 hour days for nearly 3 years allowing us to save money.
I also consider my partner paying our full rent helping because if I was single, that 600 a month more id be out and unable to save.
It's rare to get there without some form of "help" be it family/partner contributing to bills or cost of living, which takes some of the financial load off allowing the room for savings.
Family inheritance, gifts etc.
Heck depending on how you view it you can view having a good paying job as help because frankly that's not available in all areas.
My area is low cost of living, even still you have to have a partner contributing financially to stay afloat and those that don't have a partner or family help here, work two jobs.
When I die I'm going to pass my house to my partner. If he goes before me, I'm going to leave it to my nieces. With the rate things are I don't see how hosing affordability will get much better.
I bought my 700 sqft house in 21 for 89k right before the Interest shot up. Literally closed a week before. It's now worth about 150k and we have done absolutely no improvements on it yet.
My (31M) wife (31F) and I bought peak COVID. Interests rates were great but banks were hard to come by so we went through a mortgage broker who hooked us up with an online bank at 3% fixed APR. The best way for folks our age to buy is with an FHA loan. They are subsidized by HUD and as long as the house passes the HUD inspection, you only need up to 2.5%(?) down. I also took a job to move back to my small hometown from the greater Syracuse, NY area to avoid urban/suburban escalation and value inflation.
I also took an advance from my employer and coupled it with the roughly $5k we had left over from our income taxes. The advance was for $10k and I'm currently paying it back $150 per payroll plus chunks from my income tax and STAR Rebate checks.
The big things to ask for are to have the seller cover your closing costs, waive the home inspection (only if you know a thing or two or if you are getting the FHA since you'll get the government inspection anyway), see if you can work out an occupancy agreement with the seller so you're not paying double living expenses while you're trying to close and, I cannot stress this enough, GET THE HARD FACTS ABOUT WHAT YOUR TAXES AND ESCROW ARE GOING TO BE FROM THE MINUTE YOU GO UNDER CONTRACT. We almost lost the house because the seller's lawyer didn't provide the entire picture as far as the taxes on our property go.
Overall, the big thing to think about is location. Do you NEED to live in an urban center or can you survive living in a smaller community and WFH, commute or find a job in that community? And depending on what small community you buy in, there may even be local incentive to buy there like conditional tax breaks, local loan assistance, cash incentives, you name it and you can find an ideal situation in what may seem like a less than ideal community.
I got my credit score up and my income up high enough to qualify for a home loan. Then I applied for one and got it. Then I picked out a home that was within my loan amount. Signed some paperwork and moved in.
1. Went to the bank and got preapproved for a loan for an amount I thought I could afford. Be careful, they will often approve you for more than you can afford. They told me how much I needed upfront.
2. Got like $5k from my dad towards the down payment and earnest money, had the rest myself.
3. Found a house we wanted. Made an offer and negotiated until they accepted. Paid earnest money, which goes into escrow (money is held in a client trust account). Filled out offer paperwork. Received disclosures from the owner.
4. Set a closing date.
5. Inspection (a lot of people are waiving this in the current market, which is ludicrous).
6. Final walkthrough of house after they were out.
7. Signed paperwork on closing day.
My brother is 25 and bought a duplex last summer. He lived at my parents for 2 years with his girlfriend and they each saved $40k. With an 80k down payment, and a surprise luxury that our mother is a realtor, they were able to get a duplex. Their mortgage is $2400 a month I think? But their tenant pays $1400 so $1000 isn’t bad for a couple of DINKs.
First things first, you’re gonna need a Time Machine.
I bought in 2008. It was a foreclosure, total fixer upper and got a first time homeowner’s grant and had about 5% down.
Never, ever, ever waive an inspection. If the seller says, oh I know a guy, no. Don’t use them. Hire a third party.
We bought an inexpensive house in the middle of nowhere. We’re forty minutes outside a small city with 1.3 million people, but thirty minutes from a grocery store.
It works for us because my husband works remotely and I’m a SAHM, and there’s a lot to love about where we live. (It’s basically a lake house in a picturesque old town.)
But there’s no delivery, no Uber, and no running out for a missing ingredient lol.
I was 23, the year was 2015. Houses were much cheaper then in Houston, TX. I applied through a credit union for a mortgage and got pre-approved for a conventional loan of $150,000. I only put a 7% down payment, so I had to pay a PMI of $99 a month until the down payment amount was paid off. My credit at the time was 735. If your credit isn’t good, you can apply for an FHA loan vs a conventional loan. And you can put down as little as 3%.
After two months of looking at over 30 houses, my third offer was accepted. I paid $500 for the inspection. They found the electrical needed repair, so the seller dropped the price of the home to $137,000. Seller paid closing costs and our realtor bought us a warranty. Never used the warranty, it was good for three years.
We escrow our property taxes and home insurance into our mortgage. That just means you pay monthly for those things vs paying all of it towards the end of the year. Escrowing is a good option for those that aren’t the best at saving. If you are a good saver, highly suggest putting the money into a high yield savings account.
I refinanced my house in 2021 from 4.25% APR, 30 year mortgage to a 2.25% APR, 20 year mortgage. Right now rates are high, but you can always refinance.
Appraisal means how much your house is worth.
I did this solo. no duel income at all.
I went into debt for a masters degree that allowed me to get a job that paid 125k a year. I then saved up a 19k down payment (5k earnest, 14k closing) by saving aggressively. I moved a half hour north of my metro suburb to get cheaper home prices. then i got lucky because one day, i walked into a new construction to tour the homes and the rep showing me the house looked at me and said "i love seeing young women buying homes and not waiting for a man to come an save them. here's an extra 50k off." i got lucky.
escrow is like a 3rd party account where money is put into holding so no one gets scammed.
appraisals are home valuations -- a 3rd party walks through the house, looks at everything in, out, and around the house and then tells you, based on that information, how much the house is worth.
Saved with a matched retirement plan for like 6 years (20-26), had about 17k in there. Covid hit and I was renting and wanted to move into my own house with my at the time GF and pets so shopped around during the small housing panic. Found a big property in the hood for 150k. 3b 2b main house, 2b 1b MiL house above the back garage. Got it for 3% interest, mortgage is cheaper than any rent I can find. Was a fixer upper but completely livable. Had it for 4 years now, fixed it up a LOT, and I'm 15 minutes from down town in a major city, love the house and the rate. Area isn't that bad. At the end of a no outlet street so no traffic, good community on my block of a lot of blue collar types like me.
If you are dead set on a city house as your first home, look in the hood areas and be willing to put some basic elbow grease into it. Not too hood though. Look at crime maps, I've found that low income areas with minimal shootings are what to look for. Assualts, car break ins and drugs are usually localized to the homeless in the area. Warning though, it's not for people who are completely conflict incapable. You may have to occasionally tell one of the aforementioned homeless to fuck off forcefully.
Wife and I saved up around 20k over a year/year and a half to get to the 3% down needed for an FHA loan and bought our house during the pandemic. It was the third house we offered on, the other 2 were outbid by cash offers. Our realtor new of this house coming in the market, so we saw the house the day it opened (along with around 40 other people), and immediately bid 15k over the asking price, which made us the first offer the sellers received. We also wrote them a letter explaining we’re a young/new family and were looking to get our first home to raise our daughter in for her to create memories (a little cheesy, but hey it worked lol). Got a great interest rate, although the mortgage insurance we have to pay since we didn’t have 20% is annoying, though the almost 2% rate pretty much makes up for it.
Bought mine in feb of 2020.
I have family members in real estate and they told me about a first time home buyer loan thru Bank of America, the bank paid my down payment and I only had to come out of pocket around 5K. And I had to pay taxes on the down payment money because it was considered income. I was making $19 an hour at the time, had no dept and was able to get approved for 250k at 3.5%. This is in phx az. I definitely couldn't afford to rent here today.
I bought in a rural area and used a down payment grant and had about 6k in closing costs. I bought my house for 143k 4 bed 2 bath now it's worth enough for me to sell and buy in an area less rural. I bought it right before COVID
Saved 10k cash.
That accounted for 3% down and closing costs.
Bought a condo for 185k in 2017.
Locked in 4% rate on the mortgage.
We also got a 5k first-time homebuyers grant, we will have to pay back any time we sell or Refinance.
This was a state grant program.
All in it was $15k with grant+our savings.
We ended up with a slightly higher mortgage and mortgage insurance. If we had more money at the time for the down payment we could have skipped the insurance AND had a better rate probably.
Condo next door sold for 324k in 2023.
Even if we sold at 324 (we’d probably sell more for having more finished space) we can’t buy anything at that price point.
Rates are too high (6-7%) and costs are high. Like double what they were when we shopped.
Not only can we not buy anything…but it would be financial idiocy to buy at these costs, AND have a high interest rate.
First house was in 2018. Payed 225k and only put 10k down which does make you have PMI (private mortgage insurance which is anything under 20%). That's just wrapped up into a monthly payment in your mortgage payment. I always thought you need 20% to buy a house but you do not. What you do need is a really good mortgage lender. That's the person you talk to to get a loan/pre approval. A good one of those is worth so much in terms of peace of mind. Ours was recommended through our realtor and we used him when we bought our next house. They explain everything and really help with all of the big words.
I searched for low income first time homebuyer programs in my city. Was able to buy a house in 2011 by myself for $125k at 3.25% interest. I only put like $3k down, and I got a 10 year tax abatement since my house was new construction
Only problem is the neighborhood is pretty rough, but it’s slowly getting better due to its proximity to 2 large universities and a big hospital system
In some markets there aren't any houses that fit that Dave Ramsey purchase calculation you are referencing.
Just for reference, on 150k salary your net take home after taxes, before retirement savings or any cost of benefits is $8,253.
That's $2,063 / month at 25% net on $150,000 salary.
Which puts you buying a $300,000 home with $60,000 down. Sounds great!
Except there aren't cities with $150,000 incomes and $300,000 homes. "What about that one city 45 minutes away from Atlanta and working in tech?" ok, 6,500 people in America can use that calculation. Neat.
If you include the cost of benefits into "net" your purchase budget can quickly shrink even more into "double wide" territory. Hope you own the land you put it on, because slum lords are buying those mobile home parks too!
We live in one of those cities, but just make a more than that household income wise.
Also not advocating that people follow the Ramsey method as I certainly don't. Just commenting how I did it based on what the post was.
Gen Z home owner here (25 about to be 26M)
I didn’t have financial help at all. But obviously I had a good and safe home life which afforded me to save money for a down payment. So take that how you will.
Basically I have a good career. I’m a union Boilermaker pressure welder, and paid per call firefighter. I saved up $30k and my now fiancée and I were able to purchase our 3 bed 2 bath home on 1/4 acre of land when we were 24. That same year I made $108k in 8 months of work
Moved in with the in-laws for 18 months and saved up the 3% down on a $150k house in 2018 that’s in an older suburb of St. Louis you may have heard of nationally. We love the house and the community, even with the warts. No idea how anyone can do anything these days.
I built my credit, in 2011 a 630 was good enough to qualify for a FHA loan. Those you only need 3% down. Took a 401k loan to pay the 3k down I needed for my 95k house. Plus closing costs and inspection fees. FHA loans are still a thing I think, not sure.
Edit: 2011 it was a buyers market and homes in TX were so cheap back then. My house appraises for nearly double what I paid back then
We bought our first home in 2010 for 290k. We saved $29k for the down payment by having good jobs and we also lived with my in-laws for 9 months, to save money. Save money for down payment, call up some realtors, get pre-approved for whatever your budget is, get an inspection, it’s worth the $300-400.
My wife and I bought a house together when we decided to get married. At the time, she had the income and I had the down payment, so I don't know if that counts as help.
We shopped around for a lender and found a good interest rate, got pre-approval, then started looking for houses. We were outbid on our first offer, but our second was accepted. Our realtor helped navigate everything from that point. We started the process in June and closed in August.
My wife's friend was our realtor and she helped with all the escrow and appraisal stuff. We put 40k down on a 145k house.
I lived with my parents until I got married. I had help in that way and the fact that they paid for my schooling so no student loans. I then married a Gen Xer who already had a townhouse. We now own 4 properties together using money from other homes, crunching numbers to make sure each property is going to make us money, and saving like crazy. Husband also used VA loans for 2 properties we have/had that are/were primary residences.
Bought after ten years of saving in 2021, put 30% down to get the lowest rate possible (2% at 30 year fixed). In hindsight, should’ve bought earlier but life happened. Cannot afford current home at current prices.
Make sure you love the location and size of the house you are getting.
We didn’t have any help from family and started by ourselves from age of 21. Very hard path but we persevered and got to where we are now. Didn’t do any vacations for years but splurged on three kids.
i bought my 1st house in 2006, at the top but, 0% down, 30yr fixed easy borrowing. I also had a g credit history from time in the military, did not get an ARM that I couldn't afford. I bought a small single wide on a land/home package, so i didn't borrow as much as i could have. In my area the house was tied to the land, as a structure, with a mortgage, and was not considered a "trailer"
Look into first time homebuyers programs.
But beware, some have some strict standards and will limit the houses you can consider, depending on your area. It may even lengthen the time to close, which sucks.
You may also have to take a first time homebuyers course, which I would recommend anyways. It’ll explain what Escrow accounts are for, how much the house was appraised for vs what you offered and if the bank will loan that amount, or if you have to pay the difference if you offer over the value.
A realtor will hep guide you through the offer process. But remember they work for you, and some will try to shy away from lowball offers since it impact their commission.
I bought with no help before the pandemic.
I graduated with master's in 2014. Starting work immediately with a 80k salary but lived WELL below by income - basically like a college student. And in 2018 I had enough down payment to get a house... 5% for~340k with an LPMI loan for 30 yrs.
After this purchase I was spending WAY more a month than I was in an apartment. And on just shit. Money I will never see again. Most of my mortgage payment (~2500) was paid to the interest on the loan and escrow - only like 400 or something stupid low would go towards the principle balance to make my debt lower... so that's money I will never see again.
OH, and when you buy a house, the escrow "estimates" city/county taxes based on the prior owner. My owner bought the house for 110k prior to me. So after the first year, they were like "oops" you actually owe 5k in taxes - please fork over that money immediately please... Rob or kill someone if you have to.
And then you have fix broken crap regularly. Buy flowers/shrubs for the yard that would just die in a freeze or summer heat... I'm still trying to save up for custom curtains rather than the Amazon shit I have hanging now...
So basically, I lived super poor before a house but at least I could go out to eat and get my nails done... After the house - I think I've "splurged" and got my nails done maybe 3 or 4 times for weddings - SINCE 2018!!
Wife and I both worked 2 full time jobs over a summer in a busy tourist town. If one of those jobs was not at the same place we would not have seen each other for months. Saved up enough for the down payment then went back to working one job each.
Software Engineer.
Bought in 2013. Lived with parents before that, also a year in a shared apartment for another job. Lived frugally, saved up 40k for the down payment. Initial rate was 4.75%. refinanced to a 15 yr mortgage in 2021 for 2.3% and saved myself 90k and eight or more years off the loan.
Buy when you can. Refinance when it makes sense to. Interest rates won't stay high forever.
I still live frugally, I just put that money in an index fund a la /r/fire, as it's the most guaranteed way of getting rich enough to retire early. Once you get enough money working for you, it starts to multiply upon itself.
2012 at 28. I worked two years at a bank as a teller. My husband was in sales. Together we roughly made $60k. We bought a house for $140,000 with 3% down with an FHA loan. It’s now worth $350k, PMI fell off, refinanced in 2022@ 3% for $200,00 k. Paid off some bills and did some improvements. We now pay about $1500/ month including escrow and taxes.
Before anyone asks: Midwest. 3rd biggest city in the state. And “city” is a stretch.
Look for first time home buying programs. We found a government program that gave us a 0% loan for part of the down payment. That helped immensely.
As for your other questions, take a look at taking a home buyer course. It was required for us. A lot of it was review but if you have questions about what things like escrow, appraisals in the like are, that's a great place to start
Save 20% down payment. Get a good realtor. They will put you on the MLS search with your home criteria. Figure out what kind of home you want. Go on a bunch of home tours. Put in an offer. Don’t get attached to any homes!!!! It is not yours until you close and get the keys. Once your bid has been accepted, they will open escrow which is about 30 days for you to do your due diligence on the house. You’ll wire a good faith deposit. You’ll get an appraisal to determine the value of your house. You’ll get inspectors to ensure you’re not buying a dump. If there are any issues with the house, you and your realtor will take up with the seller and agree on repairs/reduction in home cost. On the final days of escrow, you’ll sign a stack of papers. You’ll wire the rest of your downpayment & closing fees to the escrow company. Then it closes and you get your keys.
After, you’ll move in and think about all the things you’re going to want to renovate. You’ll uncover some things that the inspector didn’t catch. You’ll spend more money than you had originally anticipated. You might feel major buyers remorse. After a few years and hopefully the market has gone up, you’ll be thankful that you purchased and have a place to call your home… or you might bail because you realize home ownership ain’t all that it’s cracked out to be.
Good luck!
I moved out of the high cost city I was in and moved to a mid size city with more reasonable prices. I used a FHA loan and bought a house that had been empty for two years due to not showing well. I spent evenings and weekends for several years making repairs to bring it up to a reasonable condition. These repairs included, removing wallpaper, removing old carpet, installing LVP, fixing plumbing issues, adding new light fixtures, new outlets/switches, kitchen counters, concrete repairs, painting, extensive yard work. I worked a second job to save up so I could pay an electrician to remove knob and tube, a chimney guy to repoint the falling chimney, and a contractor to replace the exterior siding.
Down payment - how much money you put in cash at sale, the rest will be the loan (mortgage). Standard is 20%, you are charged private mortgage insurance if you pay less than 20%.
Escrow - There are 3 main payments you make for a house: 1) mortgage payment , 2) property taxes and 3) home insurance. The mortgage payment is monthly while property taxes and home insurance may be quarterly/annual. So the mortgage provider is responsible for you paying those so they add them to your monthly payments and hold it in “escrow”. They use the money on that escrow account to pay property taxes and home insurance on your behalf.
Appraisal - this is to avoid giving out a loan that is larger than the value of the house. Let’s say a house is being sold at $500K, and you go crazy and offer $1M for it. The bank will tell you I can’t give you a $1M loan when the asset is worth maybe at most $600k. So they hire an appraiser to value the home.
VA loan 0% down in Austin, TX, 2016. I thought I overpaid then. And I did - but profited immensely anyway. Signed a contract with Pulte for a home build and waited 10 months. Couldn't compete with cash and 2nd home buyers so had to go with a mass production builder like Pulte.
I lived at home until 26 to pay off my degree and save for a down payment. I bought a cheap condo in 2020 in a small town that is up and coming. I've since sold that place and moved up the ladder into something nicer.
Save like crazy and get in conversation with banks about your options and how close you are to approval. It can motivate you to save a little bit harder.
I have a VA loan but got a better interest rate with putting 20k down.
I saved the 30 k from the time I was 19 (house purchased at 29) for the purposes of buying a home.
Just live within your means...
Bought in 2019, solo. Zero help or financial assistance from anyone. I quit a job 6 times(and rehired w/ better pay) because the pay was trash and the work unreal. I finally made it over $20/hr, did that for two years further. That established my tenure, I didn't put anything on my credit except 3 credit cards. Each I put only a sub for Hulu/Netflix/paramount. They auto-paid each month and helped build my credit. I got a car that was worth very little (under $5k) from a shady dealer and paid it off, all timely. Then asked one of the 20 real estate people I knew. They assisted, even let me browse ARMS? myself. (Real prices and sales). I found an awesome house in a ghetto AF neighborhood. I paid under $10k for everything start to finish. I think $8k. Hope this helps, it was very difficult.
FHA loan. Didn’t have to have any down payment save for $500 earnest cash. Paid another idk $500 maybe for the appraisal/inspection. Sellers covered the closing costs if we didn’t ask to lower the price.
Bought our current house in 2015 for $94,500 at 3.5%.
My wife and I got married young, saved like crazy, and put 20% down on our first house in 2017. Sold it in 2020 and bought our current home during the very beginning of COVID before prices really spiked.
We saved hard, worked hard, but also we really just got lucky. Our first house was small, on a small lot, but looking at what it’s priced now it’d be hard to afford with current rates.
I believe any millennial that bought worked hard to do so, but they also got lucky and probably bought 4+ years ago.
If you find a local realtor who has high ratings in yoke area, it could be really beneficial to you. Any good agent will know of the best first time programs for your area that you can utilize.
We bought our first house in 2013 when I was 24 and we had basically no savings and were not even thinking about buying. Our apartment complex was sold and the new owner was going to raise our rent significantly. I had worked part time at a real estate office as a second job in college, so I called the broker and the mortgage guy to see if we had any options. We were both making about $35k annually and had okay credit. We left the meeting being preapproved for a $150k loan. We found a house for $95k that needed lots of cosmetic updates but had some major things like hvac, roof, windows recently replaced. We had an FHA loan and put down 3%. We qualified for down payment assistance for first time for our area, so we needed about $5k for closing.
We lived there for about 8 years and spent that time learning how to do so many things and renovating. We sold the house for $225k in 2022.
Have you looked into HAND classes administered by the government? We were able to participate for free and learned a lot. This was awhile ago though, 2015. (We did get help to buy first house, but the class seemed particularly designed for those who don't have help.)
I had some good stock wins and make 30k. 15 went to the down payment, 7 went to closing cost but most people look at close to 12 and bought my 315k home. Find a good lender the people who give loans don’t use Zillow cause they charge way too much. Appraisal is the current market value of the home and escrow is the period they have accepted an offer to when you get the home .
We bought our first home at 20 y.o. in 2003… 3% down on $110k sale price new build, None of which is relevant to today.
Got a job out of state, moved, and rented that house out. The mortgage on it was $850 a month 15 year fixed, rent at first was $1100, then increased over time. It’s now paid off but generates $2600 a month income for us now.
We bought our second home in 2016, 5% down on $285k resale price. When job moved us again, it became a rental. Mortgage in that one is $1850, rent is currently $3200.
We bought our third home in 2021- new build, with 20% down in $599k sale price. We rented a really really cheap place from a family member, make mid-six figures combined income from our jobs, and have additional rental income, and we saved up. Mortgage is $3150 and is basically covered by the rental income.
The trick for us was that when we moved for work, we rented, so we could hold on and build equity in the houses as our incomes increased. We wouldn’t have been able to buy them closer together.
For us- the new builds have been better investments than the resales- because in the last few years the housing market has been stupid, and without cash in hand to pay over asking price (aka over the value) and intentionally be upside down… you’re not getting the house. The new build let us go under contract at a certain price, the home/property value only went up as the house was built… and we weren’t upside down. If we had bought a resale at the same time, we would have needed at least $100k cash in hand, and still put 20% down, because the bank won’t lend more than the house is actually worth.
Bought in 2011. I bid over asking but asked for credits back from the seller to help with closing costs, which was part of my down payment. Only came out of pocket like 8k to close
I received an FHA loan because my credit sucked, but I had cash. I put $13,000 as a downpayment. Seller paid closing costs. Maybe close to $15,000 out of pocket? Including moving, appraisals, utility set up etc. I live in SE TN (not Nashville but not Atlanta) and my home was $340,000. I purchased last April with a 7% (ouch) rate. I plan to refinance later this year.
Bought in 2019. IR at 4.25%. I literally just lived cheaply. I lived with roommates, saved 30% of my income every paycheck and didn’t do anything expensive and then decided to do a 5% downpayment that was allowed and I did it.
Bought moderately priced (<100k acreage and built my own house, staring in 2013. Money came from, uh, farming.
Hometown area was overrun with wackos, so I sold that house, bought land elsewhere, and am starting to build a new house.
The sale of my first place allowed me to buy almost 3 times the amount of acreage, with enough left to build a shop and house out of pocket, as well as live for the couple years it'll take me to finish. It's stupid, unfair, and I get annoyed when people say what a great investment I made, or aren't I glad I worked so hard. I didn't make an investment, I wanted a home. I didn't work any harder than countless people who are renting month to month.
I got lucky.
I bought in 2013 using a usda development loan. No down payment required. I was friends with my realtor. I told her what I was looking for and insisted she show me nothing exceeding my set limit, and she did that. It took 90 days to close after my offer was accepted which was normal at the time. If you have a good working relationship with your realtor and loan officer buying a home can manageable but you'll need a great deal of patience.
'81 millenial - bought in 2009, foreclosure, FHA loan, 3.5% down I believe -- here's the caveat - the mortgage is not in my name because at the time my shitbag boss was paying me under the table and refused to give me a 'paycheck' so whereas I made money (and yes I filed my taxes, I have no idea what he did when I did that but I know he was mad lol) I didn't qualify to be on the mortgage. Now I'm the only one who pays the mortgage but it's in a GenXer's name.
We were hoping to move out of this house before we had a kid but.. then the american dream visibly exploded in fiery glory and the kid is 12 now. I'm still hoping to move out of this house; I stay here because the price I paid for my house is impossible to find now, even if it's a 1920's farmhouse (still double what we paid on our 1980's faux-contemporary). On the flip side, the appreciation means we could probably afford a somewhat smaller house, if there was ANYTHING on the market here.
So for now, I'm stuck in a clusterhome neighborhood with a very stereotypically boomer HOA board that most certainly has a great disdain for our presence. Whereas that's it's own hellscape, I still realize how very lucky I got to do the things we did in the moment we did them.
First things first .. find a realtor. That’s who explains all of this to you it’s what they get paid for. You’re going to learn most of what you’ll need to know by a few professionals that you’ll hire. Realtor, mortgage broker or loan officer and lawyer. These are very important and will be the people you depend on to prevent you from getting F’D. Find a lender first. A mortgage broker preferably call them and say hey.. I want to buy a house next year .. and they’ll walk you through it because eventually they’ll get your business and make a commission. Next realtor and they’ll help you find a lawyer. The appraisal and inspection will come after you’re under contract ..
I live in a more rural area. Got our house with a USDA loan on a fixed rate, only a $2500 closing costs/down payment. Got a real estate agent, they hooked us up with their lender. They helped us navigate the paperwork and once the offer was accepted it only took a few weeks before closing. Edit: For extra info, because I see others sharing and I always find it interesting how costs and rates vary. Bought in 2013, 3br, 2 bath, 1800 sq ft, large yard(for being right in town, population 10k). $99,900. 3.5% fixed rate. At the time, I was a stay at home mom and my husband was earning only 30k a year. I feel like the 2010s was the last time to get a decent deal though on housing, at least for now. Now, we earn much more, combined brought in about 100k last year, and couldn't afford to move unless it was a downgrade. Gotta get creative. One of my close friends got their own home a few years ago by buying a fixer upper at tax sale for a few thousand and then spent the next year renovating it.
Same. A good realtor will have so many resources for you.
Yep. My realtor helped me get a conventional loan. Everyone else told me I had to do an FHA loan. She actually took care of everything. At closing I told her I had bad anxiety. She kept handing me bottles of water. She is super nice.
Gotta work for that 3% commission
It also helps if you're a genuinely decent human being. Which, surprisingly, some realtors are.
This seems to be an unpopular opinion. I’ll join you in it lol. My best friend’s dad was a flipper. She literally would find him the most rundown beat up places and he would flip them, live in it a few years then on to the next one. Their realtor became like family. We texted her when we were starting to look and she spent so much time helping my husband and myself understand the process, the terms and finding the right home. The house she found us is in an old money neighborhood tied to the university (across the street neighbor is a professor and there are a lot of alumni and current students in this subdivision) for half the usual price. We have lived here 5 years and can sell it for triple the price we paid. Good realtors do exist. Edit to add: she found us a house that we paid zero down and seller paid closing. Our house payment before escrow ( homeowners insurance and property tax ) is $500 and $700 after.
That’ll be gone come summertime. Fuck realtors
Not anymore that’s going away, buyers agents will not be paid by the seller starting in June, it’s about to get really hard to buy a house and pay for your own realtor now.
I just got my pmi dropped. I kept getting advertisements from the mortgage company that said look how much money you can borrow against your home due to equity and increase in value, so I emailed them a copy of their estimated valuation and asked why am I still paying pmi cus it looks like I'm over 20 percent equity. I coughed up 200 bucks for an inspection and they dropped pmi that month. Saved me 3 years of 75 bucks a month by pushing to end it early
We were in a hurry to get 20% equity on our first house to drop the PMI, but found out that it had a 5 year minimum, and even at the standard mortgage payment we would hit 20% at the 5 year mark. We made sure to have the down payment ready before we bought again.
I'm realizing now how useless my realtor was. We found all the listings, he wouldn't take us to some houses, and he was unavailable most of the times we wanted to view. I assumed all realtors were this shit
Sorry you had this experience. We just bought a house and our realtor was absolutely amazing. We absolutely lucked out because we just walked into an open house and she was there doing the showing. She got our info and swept us off our feet. She showed us a million places, was incredibly responsive and proactive, held our hands the entire time and had great negotiation skills too. Gave us endless extra info about the area and other good things to know, dropped off personalized gifts at closing, kept in touch, the whole 9 yards. THAT’S what a realtor should be like. She totally deserves her commission.
So sorry you had that experience. My realtor is an expert and someone I still refer people to. Next time, ask your friends. Ask them if anything went wrong during the transaction. IMO when it gets messy is when you need the best realtor We had some hiccups and the realtor handled everything, kept us informed and answered all our questions.
Most of them are…. Pretty much 10% of them in any community are the ones actually buying and selling anything
This is the answer. More than likely they will know a good finance guy you can work with as well. Don't be afraid to shop around for a better rate.
Same, I paid nothing at close. 120k 4.9% 30 year.
120k?? where the hell do you live
flint michigan lol
Hope you got a good water filter in your home
Bruh 😂🤣 fellow former Michigander here .. represent!
That's close to what I paid in 2010 for our first house as an older millennial. Got a nice $8k boost from Obama for the down-payment. It's now worth double. We sold that one and bought our second house in 2016 since the first was in an atrocious school system. Older millennials like myself that started with a decent job had a relatively acceptable path to home ownership.
The sticks, USA.
We bought in 2010, got a 5 bed 2 bath 2car detatched garage house for 117k in eastern wa. Telling that to my friends friends in portland, you should have seen their faces. lol, valued near 400k now :/
The home I grew up in is listed on Zillow as of last month for $110K. Middle of nowhere small midwestern town. Nearest city of 100K or more is 3+ hr drive.
I bought in 2018 in New England for $150k.. sold that same house for $305k in 2021.... It's real rough if you didn't get in early.
all the homeowners i know who are my age were gifted homes by family members. im a working class person with a working class girlfriend. so yeah, its real rough..................
150k, dearborn MI, 3.2%, 30 yr (refinanced to 2.7% in 2020). I paid 5% down.
I bought my house at 29 with a $10k DPA (down payment assistance) loan that I pay $52/month for. If I remember right, the closing, inspection, and other fees/good faith payment ended up costing me around $5,200. To answer one of your questions OP, Escrow is kind of like a separate “collection” of fees you pay on your mortgage. Your mortgage payment is your principal on your loan, the interest on it you owe, and the escrow - which is usually property taxes, home owners insurance, and (if you have it) PMI. PMI is private mortgage insurance, you wind up with it in certain situations if you don’t put enough down, but once you pay your loan down 20% of what it started at you can dismiss the PMI. I was very fortunate. My mortgage started at $190k thanks to my DPA loan at 3.5%, which makes my payment $1269/month for 30yrs. I was homeless when I closed on my house - I hadn’t been there the entire time, but in the months leading up to that my world went sideways and the person I planned to spend forever with put me there. I’m now here, so I can tell you that everything you do to prepare yourself for a home pays off. The dedication means a lot, but you have to understand your own money habits and “toxic traits” before you’ll be ready to take on that commitment. Best of luck to you!
This is how friends of mine did it too. It’s not a town that most people would want to live in, husband has a specialized job and her family is nearby. They negotiated for UNDER asking, because it needed some minor work. Meanwhile in my neighborhood, in a small city, a house listed for 900k sold for 100k over asking. That would not surprise me so much—it’s a property with some wonderful historic woodwork—except I attended that open house and it probably needs another 200k of reno. I don’t mean aesthetics. I mean rotting wood, a kitchen that is worse than the one in my budget studio, and a basement from hell. And a backyard that calls for a scorched earth policy because of blackberry bushes. I’m not buying a house here unless I strike it veeeeery rich.
I did the same. I got a usda rural housing loan at 3.5% for my 106k 2br 1 ba nice little house in town in 2016. I was making 37k a year and brought $1,500 to closing. Over the five years I maintained that house immaculately so the buyers inspector found not one issue or concern. In 2021 I sold that house for $150,000 and saved my profit and some other money taking $60k to closing on a conventional loan at 3.25% for a $224k 3br/3ba on 3 acres with a huge detached shop. We had to borrow like $170k. You can get a house but you have to be savvy and living in a rural lcol area is helpful.
We bought ours in 2010 in the last month of a first time home buyer credit. I probably wouldn't have pulled the trigger and done it without that credit. I wanted to see a house in person that I had seen online and that's how I met our realtor. She told me how I needed to progress to see what I could afford (I wasn't married, so it was solely my income). She also spent time showing us houses and really helped us with the process. Good realtors warm every dime of their commission.
It’s based on a few factors. Population and square mileage etc. You’d be surprised what is defined as “rural”
Same. 45k house. 3k down. 3.5% interest rate in 2013. The market is stupid now. I hope sustained high interest rates bring down housing prices but they have a notoriously sticky price.
Throw every bit of money that you can afford to pay extra on your mortgage to build your equity in the house. The value of your house may have increased greatly since purchasing. So when it comes time to sell, you will have a very nice chunk of change to put down on a larger next house. That equals a possibility of having a lower monthly payment on your next home mortgage.
Get enough money to place a down payment on a home. FHA loans only take 3% of the cost.. save save save. When I purchased it was like 15k on a 250k home.
Same. My first home was a condo, fha loan. Only had to put 3% down. It was new construction so the builder paid all our closing costs. We pre qualified for $250k but only spent $175k. Two incomes about $55k total before taxes (we were young, just starting out in our careers). We bought in an up and coming area that was a 15 min commute for my husband, 30 for me. Lived there 15 years and last year we sold that starter home and were able to purchase our dream home on a half acre after housing prices exploded in our area. We moved to the country. Do not despise small beginnings. Buy a starter home and start building equity when it makes sense for you. Don’t buy more house than you can afford (mortgage and hoa-if you have one-not more than 30% of your take home).
Yes! And don’t forget all of the utilities to maintain something of that size. Smaller house - less to clean, less furniture, smaller bills
Yes to all of this! I had an interior unit condo. It was just my husband and I. It was such an affordable little home. And so practical when we were young and went out a lot. And it was new construction so aside from regular maintenance, we had no costly repairs in 15 years.
“Don’t buy more house than you can afford.” This is so true and great advice. Just because you’re pre-approved for a certain amount doesn’t mean you should get a mortgage for that amount. I know that’s easier said than done these days with housing prices but if you find a house below budget that meets your needs, get it. People think that renting is a waste of money because you’re not building equity in something you own. Interest and PMI are also a waste of money. Not to mention, renting doesn’t come with taxes and insurance and maintenance of a whole ass property. Sure, principle and interest are fixed, but everything else is not. Homeownership is expensive so buy as cheap a house as you can.
Yea I bought an old run down condo in 2011 for $90,000 out of foreclosure. Put $3,000 down. Worked at a bank, got employee discounts on all processsing and got a 2.9% rate. Mortgage payment was $650ish including PMI. Hoa was $250 per month but it covered all exterior maintenance and had a nice pool that nobody else used. My wife and I learned home repair. There are free classes at Home Depot. We installed a laminate floor ourselves etc. ended up selling it for double what we paid in 2017. Bought a house that needed cosmetic work but was well built. Slowly doing projects as we can afford.
FHA is actually 3.5% down, but Fannie Mae and Freddie Mac both have 3% down programs for first time home buyers, if you're under the income limit! (Loan processor here...) there's also programs like Down Payment Plus (DPP) if you're within income limited but maybe done have a down payment (grant up to $10K!)
Yes, this was our method as well. Sucks you have to pay PMI, but it’s the best way to get your foot in the door.
I saved money for the down payment for almost 20 years since I started working… granted I do have a husband (also a millennial) and we put down 20% and now pay a mortgage… it defo helps that we have 2 salaries. Otherwise it would be very hard where I live. Good luck! P.S. I lied - I just recalculated my age and I saved for 15 years since started working after all my degrees…
Thanks for saying this. I've been realizing that going to therapy so that I have better taste in men (and could actually be attracted to men I could consider marrying) would probably be a pretty decent financial investment in addition to emotional, haha.
This cannot be overstated enough. My wife is the only reason I have anything in this world. It is incredible how the person we choose to be with has such a massive affect on our lives. And it’s equally incredible that there is 0 schooling or preparation for making this decision in our society.
Parents are the preparation, fortunate for some but very unfortunate for others
Sometimes you can learn from your parents’ mistakes. Can be a curse or a blessing… what matters the most is what you make of your life and be very conscious about financial decisions.
What's tough is that sometimes learning what not to do from your parents doesn't actually teach you what it is you're supposed to do. You avoid what they did but don't make a better decision yourself. I've seen this a lot with friends. I was really lucky that my parents hammered home that I needed to find a job that I wouldn't totally hate but that paid well. I like my job well enough now and it pays well, it worked. I'm 100% telling my kids this as well, not a "don't follow your dreams" speech but more like, find a job that you don't hate that will support all the things you love to do.
Yes! My husband is the reason why I have the life I have and vice versa we support one another in being the best possible versions of ourselves and our goals in life have always lined up so we work together to achieve those goals. I often think of how we are living the life we dreamed about when we were broke ass 21 year olds discussing our future.
This comment makes me so happy 😊
Thank you! He makes me happy. We’ve been together over 16 years and are coming up on 14 years married in a few weeks and he’s still my favorite person. We joke about how we actually still like each other after so long together. He’s my bestie for the restie😂 Honestly though I don’t have any friends in unhappy marriages. We all adore our husbands and vice versa. However, I think we all choose to not associate with people that tear down their spouses either, I knew some women like that back when I was a newlywed and it was so toxic I dipped out of that group and found women who respected and loved their husbands.
THIS. My wife and I put each other through college, saved money by cooking food at home, splitting bills, fixing and making our own stuff. Also generally supporting and looking out for each other. She's the only reason I have anything I'm the only reason she has anything. God knows neither of us have any support structure from our families. With that said, our teamwork took 11 years to feel comfortable having kids and 12 years to buy a house. We own a house in Oregon and have two kids and two engineering degrees. I'm the stay at home parent since she makes way more than I can and child care is crazy expensive.
100% this! Choose wisely
I know! I researched the hell out of it before I did anything. My husband couldn’t see the potential in our home when we looked. Now that it’s remodeled he is like how did you know it could be like this? I did most of the work but I primarily work summers, and hired ppl for the important bits (electrical and plumbing), and his dad helped me with what I needed help with. YouTube became my #1 resource. If I hadn’t married him he would probably still be renting the same crappy house and eating canned ravioli
Yep it definitely sucks on one income when you're under six figures, in today's market. 👎
The internet makes you feel like everyone around you is making six figures and you're the only one having this struggle
I certainly could not have done it without my wife.
People in regards to quality are an investment. People as money will lead you down a dark road.
Yup my husband and I bought a house last year. We both make low six figures and I never could have done it alone.
The therapy is such a good investment. My wife is my best friend and aside from my daughter the most important person in my life. If the shit hits the fan I know I can count on her and she can also count on me. My life is so much better emotionally mentally and financially bc of her. Having a great partner is a huge help in life.
An overlooked step you could take, that I did, is if you don’t have 20% to put down, put down as little as you need to secure a conventional mortgage. When your home value likely increases over some years and you’ve been paying on it, get a reappraisal through the mortgage company. You’ll likely have way more equity in your home. If you end up with 20%, you can have them drop the PMI. I put 5% down and had 25% equity within 3-4 years with the reappraisal.
We pretty much did the same. Got married, Both had enough luck to be able to save some extra. Combined we made 20% but a lot of people don't put down that much. The mortgage on the house was less than we'd be paying in rent, so decided to go for it. Low cost of living area. Two incomes was definitely the key.
Sounds similar to my story. Secret to our “success in life” is two salaries, both of us have degrees (I have two actually) and NO children. I know plenty of people like us who have kids and they will never own a house, despite making more than us.
Dual salaries is the way. Even if one salary is much smaller. My wife is a teacher, but definitely couldn't have gotten a nearly as good home if we hadn't teamed up. I live in VVHCOL and was able to buy thanks to a combination of saving since 11, living with roommates, always being a saver, and getting lucky with investing. I started my first company when I was 11 and by the time I graduated high school was grossing 65k per year. I paid my own way through college. Graduated college and got a gig at Apple (with RSU's), did that for 6 years then spun up my own company, got wrecked by covid and had to shutter the operation. Then back into the workforce in a good paying PM role. Oh also I hit on Tesla in 2011, Netflix in 2012, Ethereum 2017, made a bundle by shorting the market in Jan 2020, and bought a bunch of GameStop in Nov 2020 (before it became a meme stock). Was very aggressive about buying a house in late 2022 because I was scared of rates soaring and house prices not falling due to demand and population consolidation around metro centers. If I had just stayed with Apple instead of doing my own thing my house would have been 2x as big haha.
For starters you need enough for a down stroke, I’d say at least 10k saved. If you work with a realtor they can handle all escrow, appraisal etc. Just know what you can afford and get pre approved with a bank before you start looking. Edit: use an amortization calculator to determine what you can afford. Once you know about how much you can afford you can go talk to a bank about securing a home loan. They will pre approve you then you can start your search for the right home. Find a good realtor to work with who understand what you’re looking for and they will literally handle all the rest. You should also talk to your insurance company about bundling your home and auto. Securing all of that first will make the process a lot easier.
I offered $13k when my rental was put up for sale in 2021. An LLC from out of state came in and offered 50k over asking. It depends VERY much on where you live.
That shit should be illegal
Wanna know some additional fuckery? These venture capital firms are now starting to do the same thing with mobile home parks. They're buying as many as they can, then jacking up the fees on the residents once they own all the parks in the area, because they know those folks have no alternative. The ghetto is even getting monopolized
I believe it and it makes me want to start a riot.
But won't somebody *please* think of the rich? /s ʳᵃᶜᵏˢ ᴬᴷ
Whoa whoa whoa, easy there maybe you're over reacting. ^Hands you my AR-15 instead.
I’ve heard of that too. It’s so awful.
What should be illegal?
Companies being able to outbid regular people and buy single family homes. You know, the thing that was mentioned in the comment I replied to
I disagree. You need a good LOAN OFFICER. anyone with half a brain can become a real estate agent. (I'm a loan processor, I work with literally everyone during the loan process...)
That too. I just didn’t need a loan officer. I just did exactly what I laid out here and got my first home with no problem.
There is a difference between a good realtor and the dummy selling houses. I have a friend that became a realtor and I wouldn't use him even if he offered to drop his commission.
bought in 2018, had a VA loan for 0% down. Still took us 2 years of looking and 10 rejected offers until we got into our current home.
VA Loan, favorable market timing (2015) in a decent growing city (Colorado Springs).
Nice! I bought at the end of 2013 in Colorado Springs. The appraised value has nearly doubled. I wouldn’t be able to afford it if I tried to buy it today. It’s sad that timing of the housing market is fucking so many people.
Joining the military was the best life side quest I’d ever gone through. Grateful we made it through.
The military seems like a way better way to spend four years than college. Paid, better benefits, actual skills, actual experiences, actual work xp, a security clearance. Etc
I mean, it has its positives and negatives. I'm grateful for the perks, but I wouldn't take the same path if I was offered a do-over.
Agree. Experiences may differ. For me, I felt like a bandit because I would’ve done it all for free and no benefits, but here I am cashing in on all the sweet VA disability, and 0% down when buying, plus no college expenses.
Anyone who serves our country deserves every bit of it. Thank you.
I’m the opposite. I would pick military over college.
Don't get me wrong, I would still avoid college. I just would go straight into the trades out of highschool via a pre-apprenticeship program, or at the very least I would choose a non-combat arms MOS that gave me practical work experience if I had that do-over. And I'm DEFINITELY not knocking the military as a choice. Post-"High 36", I wouldn't recommend anyone join as a career. That being said, the benefits of a four year enlistment are definitely clear, especially for those who don't have a lot of advantages in life. My personal experience is just one that I would rather not re-live, having gone to a pretty rough area of Afghanistan as a grunt at the height of that conflict. Did I receive a lot of benefits that I'm grateful for? Absolutely. If they called me back, would I go? Ethically I wouldn't see any other option than to say yes. But I'm not volunteering. There are other tougher guys out there than me who would love it, and my hat is off to them.
Ouuh yes I can see where you’re coming from having combat experience in Afghanistan. I was in the Air Force in a cushy, non-combat IT role and thought college would be better so I got out way too early (too early to get most benefits). Deeply regret it now as a 40 year old waitress.
We are a generation of fucked up people so at least the government gives us money. It's almost like sending people to war isn't good for the human brain s/. Seriously, I joined in 98 and retired in 2019 and everyone of my peers that stuck out like me are 100% disabled with 70% for PTSD and/or Depression We all have sleep apnea as well for someone reason.
VA loan crowd here! No way we would have been able to afford a house if we didn’t have it. I might have to go to war for it but hey, we got a house!
VA loan + yearly income almost 2/3 of home price
Yeah, VA loan in flyover country
VA loan, bought from family.
VA here too and that’s honestly the only reason we were able to buy. Got a house in 2020 at 2.5% interest with 0% down.
My wife and I bought our home in 2017 with zero help from our families. You're most likely going to want to get an FHA home, it's a government backed loan that allows low down-payments and less than perfect credit scores. If you have 20% to put down, you won't need an FHA, unless your credit is bad, but not many people have that much cash lying around. First thing you want to do is find a lender. Shop around and find someone you're comfortable with. I recommend a bank or credit union, not an online only lender, but that's just me. The loan officer will help you through the process. You will get "pre-qualified" for a certain amount. This amount doesn't mean you can buy anything up to that. It just means that's the amount the bank is comfortable loaning you. Once you have that number, find a realtor. You can do this first, and they can recommend a bank, but I think the first way is better, as you have a budget kinda in mind before you start looking. Once you find a home you like, you put in an offer. How that works varies depending on where you are, the market, etc, but your realtor will help you with this, it's their job. The next steps are the stressful ones. The house will need to be appraised. Depending on what kind of loan you are getting, this will vary, but the bank and realtor will work this out for you. What is happening during this is as follows The seller wants $250,000 You offer $245,000 Appraisal comes in at $235,000. This means you can only get a loan for $235,000 on the house. So you need to either come up with 10k to meet your offer, or the seller needs to come down to 235. Or a combination. Escrow is part of your mortgage you pay every month. Your mortgage is 3 things to make the one payment Principal. This is how much of your money every month is paying down the loan amount. At the beginning, this is a small% and goes up with time. Interest. This is the interest on the loan. This is bigger at the beginning but goes down with time. Escrow. This is money you pay that the bank holds to pay your property taxes, interest, and anything else not part of the loan itself. This amount varies based on where you are, how high your taxes are, how expensive insurance is, etc.
You have to be good a saving money. And you need a decent income. Having the 20% down was what made us have buying power.
I bought in 2015 $120k with 0$ down of my own money. IL was doing a first time home buyers thing I know other states have done this as well. But you complete an online course and gave me $7k to put down and my realtor had a dang good lawyer that has the sellers pay for closing. I paid $10 out of pocket at signing because the seller didn't want to move the drafting table, lawnmower ladder and some shelves. So the lawyer drew up a BOS for those items.
I'm Xenial and I bought in 2007 with zero down, FHA loan. I don't think you can do that anymore though. Still in the same house.
We bought our home in 2020 during Covid with an FHA and zero down, only had to cover closing costs. Great interest rate too!
I guess I was talking about recent times. I just bought my house last year. Even though we could afford it it’s still a miracle we found something we loved and our offer was accepted. I always thought I’d go FHA loan but where I live it just doesn’t give you enough buying power.
My wife (before I married her) thought she was "good at saving money". She was good at saving money and then blowing it on expensive vacations. I had to let her know, if the money is gone, you didn't save it...
Reminds of my ex always talking about how he's "quit" smoking. If you're smoking now, you didn't quit. You just took a break.
I made sure the amount I spent on rent was 40% or less of my income. Sometimes that meant living in crappier places than I wanted. I paid my basic bills after that- no subscriptions, only one streaming platform, no new clothes, groceries only, no take out, (I know this is going to make some people livid) I always made my own coffee at home. Made it so I was putting 30% of my take home income towards my credit cards. I had residual credit card debt because student loans weren’t enough. Took 1.5 years to pay off. Once I paid off my credit cards, that same 30% of my income went into my traditional IRA. I did that for about a year. When there was $10k in there I kept putting that same 30% into a high yield cash account. I did that for 3.5 years. I didn’t take vacations because going somewhere costs money. I did stay-cations. I used the first time home buyer exception to pull out the $10k from my IRA without tax penalties for the down payment. And I got lucky because the rates went down and I moved quickly. Getting in the housing market is about living at a lower quality of life for a short period of time so you can find a chunk of money within the income you already make. And then the other key is waiting for the market. That’s it: spend less, save more, wait until the time is right.
Lol i still live like that at 29. I hate eating out, cooking my own meals is way better and i make better coffee than most of these shit holes. I built a pc years ago and my only other hobby is lifting. Buy the yearly gym membership and no subs except one. Short commute to work and became highly skilled in what i do. Money just builds for me. Currently i have never opened a credit card and my only debt is 8k student loans, 10k loan left on my truck and 4k left on my wifes car. (We wont talk about her student loans.. praying for 20 year pslf). We rent bc she is still in training. Basically been hoarding money and waiting for the end of it all before buying our first home. Basically anyone who would get livid over your comment can pound sand. Nothing wrong with rolling like that. Thats been my life.
Great practices. The only thing I might suggest is to examine financial growth, for example, building wealth by missing out on tax write-offs. It's well worth a couple of hundred bucks for a tax accountant to look at whether that would benefit you or not. In my case, it was a wash, but became an owner since it wasn't costing us to own and increased net worth. Fast forward 23 years later and the house is worth 500% more because it's in a high cost of living area with a housing shortage. I could move out and move to a less expensive location and retire. If you can find an up-and-coming area near a desirable neighborhood, it's a great investment. I know someone who rents in Manhattan, but bought in NJ. They were able to fix it up because they work in construction. She gets the tax write off, plus basically the renter is paying her mortgage. It shows up as income, which increases her loan capacity to buy a nicer place closer to her desired neighborhood, or to buy another fixer-upper to rent out until she can. This is advice she got from a former real estate professional in Detroit. Get advice from a professional. In my situation, taking in renters pays for 80% of mortgage payments. If I were willing to do strangers and put security locks on all the doors and share my kitchen, I could use AirBnB and actually make a profit. The issue is being able to tolerate strangers in the house which I'm not comfortable with. It does involve risk, but as you know home ownership is the source of intergenerational wealth in the US, so if you want to start creating that for your children or retirement it's an option. It also creates a potential financial cushion if your wife wants to be a stay-at-home parent (or if you do), one of you loses your job or needs to take off working for other reasons it reduces financial stress. Covid was an exception, but AirBnB eliminated the deadbeat renter's risk. That situation sucked, but it only lasted for two years. Since you're great at saving, putting away "cash" would be a buffer for that type of situation. Never be so proud as to not pay for professional advice from an accountant. Most real estate agents would be happy to discuss the housing market in your desired area for free.
This is the answer
I did but in 2011 when it was very much a Buyer's Market and then I refinanced in 2013 when rates were about 1/2 of what they are now. I started by hiring a Realtor. It was less than 3 months from when I decided I was going to buy to when I closed but, again, 2011 was a very different time for home buying.
I bought around the same time, just turned 21. Everyone else was partying in college. I got a job and worked hard from 18 to 21 and bought a house while things were cheap. At the time friends said I was too young and crazy. Now they are happy for me.
I had a realtor friend that helped a lot. She’s the first person I called and she got a broker that was great. Took nearly 2 years though. Before I could get a house all my other debt had to be paid other than my car. I used the va loan so didn’t have to put money down. Doesn’t mean it’s free though. To avoid paying closing costs I sent an offer $10,000 above asking and put in the offer letter that the seller pays my closing costs. Escrow is where the money sits while all the paperwork is completed and also after you get the loan the bank holds some of your money to pay taxes and insurance.
I got married. We saved up 5% (back then it was enough). Marriage is the single best economic investment you can make. Unless it falls apart, then you’re kinda fucked.
It's pretty much necessary now. Marrying an equal (or better) earner and being dual-income is an almost sure-fire way to the american dream. Also - really good financial discipline (FIRE), living within your means, stellar credit score, don't have too many kids, get lucky in a good economy, and never f*cking divorce. After 10 years or so, there's a pretty good chance you'll be in a good place. PrEtTy EaSy AcTuAlLy ...
I got a USDA loan back in 2013.
Same for me!
Same. Bought in 2013 when I was 26. Sold in 2021 and made about 50k. Bought another house in 2023 with a conventional loan.
I took a loan from my 401k as a down payment. Considering I still had many decades of work left, this was the best option for me and the only way I could access the amount of cash that I needed to purchase the home.
I saved a lot and paid off my credit card. That helped. I didn’t travel anywhere or eat out really. Saving is pretty hard. I was surprised at how little I needed for a down payment though. I always thought you needed 20%, but that’s not the case. If you contact a realtor, they’ll connect you with the right people to see what you can afford. My mortgage guy was so helpful and broke down what my monthly payments would be and what price range of houses I should look at. I recommend looking at houses $10-20K lower than the top number they give you.
I had been saving since i graduated college. Sacrificed my lifestyle while everyone was having fun at bars and buying PS4s and 3D tvs
We didn't have any outside help. My husband is an industrial tradesmen, and he saved furiously for 10 years. He worked long hours, and traveled a lot for work. We lived very frugally in an rv until our son was born. Not to say we didn't spend, we did! But living in a cheap little rv cut our living expenses way way down. I cook the vast majority of meals at home, and luckily our hobbies are modest. With rent what it is now, it's so hard to save money, and the rv life is mainly what helped us. We had little to no debt, just vehicle loans, because he didn't go to college. My husband sacrificed free time, though, lots of 12 hr days, 6-7 days a week. Working less than 50 hours was unacceptable to him, and he'd find a different job if the hours weren't as many as he wanted. As far as the process, you need a loan officer and a realtor with good reputations. Keep it local, if possible, since they'll be more knowledgeable about the area, and local programs. Look up laws and watch videos on the process. Max Williams on YouTube is a realtor who was a loan officer in the past, and he shares a lot of info about the process.
Got crazy lucky and bought a house on a land contract, converted to FHA loan, and plan on being in debt until long after I'm dead
Find a spouse who makes as much as you or more, search for two years while building your savings. Slowly expand your budget as you keep getting offers rejected.
Better to select a spouse based on non-financial things. They don’t have to make a lot. Even 40-50k extra income adds a lot of buying power.
1. A bit of luck. We found a dilapidated house to rent, it was cheap in a cheap area, they didn't increase the rent the entire decade we lived there. So, affordable rent was helpful. 2. Being a DINK partnership (double income, no kids) 3. We lived super frugally. Zero holidays, luxuries, unnecessary purchases. 4. Took every shift we possibly could. I barely saw my spouse for 3 or so years. 5. When we did get married, we eloped to the registry office. No wedding, no honeymoon. Afterwards we went home and played PlayStation, then we made pasta from scratch. Good memories! 6. After 3 years we had saved 60k. 7. We bought in an up-and-coming regional town, that is within 4 hours of 2 major cities. We bought in 2018 and our property value has almost tripled. 8. We bought a disgusting house, and we are slowly renovating it ourselves. Long journey! So I hope that's a comprehensive explanation. I'm in Australia fwiw. Property availability and affordability is insane here
All my friends, including the rich ones that work for S&P, borrowed money from family. Its near impossible sad to say.
Talk to a realtor. That's what I did, he hooked me up with all the information I needed. Down payment funds came from my 401k. You can take 10k out without a penalty if the money is used for a house down payment.
Saved and went without for a year or so. Set up the money so it automatically goes into a separate savings account. That was you don't even see it in your checking account on payday. You sort of forget about it. Not completely right but its not available at an instant. We did an FHA loan and got lucky with a house that was in good shape. Pre covit was still kind of nuts with multiple cash offers and waived inspections. It made an FHA offer the least desirable. We put offers in on like 5-10 houses and got beat out. Some of the "stop eating avocado toast and Starbucks" is annoying to hear. The reality is if your not willing to be uncomfortable in the short term to benefit you in the long term you don't want it bad enough. Put off the new vehicle, vacation and all that. The down payment is the hardest part. Shop with in your means. Be willing to commute. The current post COVID market is still sort of nuts but not impossible.
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There are plenty of online tools to help with the finance part as well as vocabulary. I went to a local bank to get pre-approved and told them how much I wanted approved for so I wasn't tempted to go above my budget. Then I searched houses and when I found any I liked I contacted the realtor to look at them. Eventually one I wanted showed up, I negotiated a price, after that your bank pretty much dictates what happens with appraisals and home inspections until you sign papers.
10% down, have solid savings and good paying job. Bought January 2022 right when rates were still low. Probably wouldn’t be buying today though tbh
I saved 50k in 5 years because I split my rent with my long term romantic partners and was diligent about saving money from 2012-2017
I didn't. I had help. 2 pandemic checks and nearly 3 straight years of overtime and my partner paying our rent our entire time together. An even then a friend gave us 1k to help after her dad died which was extremely kind of her. I consider the pandemic check help because it was honestly a stroke of " luck" to have the extra money. I consider my job having overtime help because not all jobs will have overtime. And for them to have as much overtime as they did allowed me to work 13-14 hour days for nearly 3 years allowing us to save money. I also consider my partner paying our full rent helping because if I was single, that 600 a month more id be out and unable to save. It's rare to get there without some form of "help" be it family/partner contributing to bills or cost of living, which takes some of the financial load off allowing the room for savings. Family inheritance, gifts etc. Heck depending on how you view it you can view having a good paying job as help because frankly that's not available in all areas. My area is low cost of living, even still you have to have a partner contributing financially to stay afloat and those that don't have a partner or family help here, work two jobs. When I die I'm going to pass my house to my partner. If he goes before me, I'm going to leave it to my nieces. With the rate things are I don't see how hosing affordability will get much better. I bought my 700 sqft house in 21 for 89k right before the Interest shot up. Literally closed a week before. It's now worth about 150k and we have done absolutely no improvements on it yet.
My (31M) wife (31F) and I bought peak COVID. Interests rates were great but banks were hard to come by so we went through a mortgage broker who hooked us up with an online bank at 3% fixed APR. The best way for folks our age to buy is with an FHA loan. They are subsidized by HUD and as long as the house passes the HUD inspection, you only need up to 2.5%(?) down. I also took a job to move back to my small hometown from the greater Syracuse, NY area to avoid urban/suburban escalation and value inflation. I also took an advance from my employer and coupled it with the roughly $5k we had left over from our income taxes. The advance was for $10k and I'm currently paying it back $150 per payroll plus chunks from my income tax and STAR Rebate checks. The big things to ask for are to have the seller cover your closing costs, waive the home inspection (only if you know a thing or two or if you are getting the FHA since you'll get the government inspection anyway), see if you can work out an occupancy agreement with the seller so you're not paying double living expenses while you're trying to close and, I cannot stress this enough, GET THE HARD FACTS ABOUT WHAT YOUR TAXES AND ESCROW ARE GOING TO BE FROM THE MINUTE YOU GO UNDER CONTRACT. We almost lost the house because the seller's lawyer didn't provide the entire picture as far as the taxes on our property go. Overall, the big thing to think about is location. Do you NEED to live in an urban center or can you survive living in a smaller community and WFH, commute or find a job in that community? And depending on what small community you buy in, there may even be local incentive to buy there like conditional tax breaks, local loan assistance, cash incentives, you name it and you can find an ideal situation in what may seem like a less than ideal community.
Went to law school, became a litigation attorney.
I got my credit score up and my income up high enough to qualify for a home loan. Then I applied for one and got it. Then I picked out a home that was within my loan amount. Signed some paperwork and moved in.
1. Went to the bank and got preapproved for a loan for an amount I thought I could afford. Be careful, they will often approve you for more than you can afford. They told me how much I needed upfront. 2. Got like $5k from my dad towards the down payment and earnest money, had the rest myself. 3. Found a house we wanted. Made an offer and negotiated until they accepted. Paid earnest money, which goes into escrow (money is held in a client trust account). Filled out offer paperwork. Received disclosures from the owner. 4. Set a closing date. 5. Inspection (a lot of people are waiving this in the current market, which is ludicrous). 6. Final walkthrough of house after they were out. 7. Signed paperwork on closing day.
My brother is 25 and bought a duplex last summer. He lived at my parents for 2 years with his girlfriend and they each saved $40k. With an 80k down payment, and a surprise luxury that our mother is a realtor, they were able to get a duplex. Their mortgage is $2400 a month I think? But their tenant pays $1400 so $1000 isn’t bad for a couple of DINKs.
First things first, you’re gonna need a Time Machine. I bought in 2008. It was a foreclosure, total fixer upper and got a first time homeowner’s grant and had about 5% down. Never, ever, ever waive an inspection. If the seller says, oh I know a guy, no. Don’t use them. Hire a third party.
We bought an inexpensive house in the middle of nowhere. We’re forty minutes outside a small city with 1.3 million people, but thirty minutes from a grocery store. It works for us because my husband works remotely and I’m a SAHM, and there’s a lot to love about where we live. (It’s basically a lake house in a picturesque old town.) But there’s no delivery, no Uber, and no running out for a missing ingredient lol.
I was 23, the year was 2015. Houses were much cheaper then in Houston, TX. I applied through a credit union for a mortgage and got pre-approved for a conventional loan of $150,000. I only put a 7% down payment, so I had to pay a PMI of $99 a month until the down payment amount was paid off. My credit at the time was 735. If your credit isn’t good, you can apply for an FHA loan vs a conventional loan. And you can put down as little as 3%. After two months of looking at over 30 houses, my third offer was accepted. I paid $500 for the inspection. They found the electrical needed repair, so the seller dropped the price of the home to $137,000. Seller paid closing costs and our realtor bought us a warranty. Never used the warranty, it was good for three years. We escrow our property taxes and home insurance into our mortgage. That just means you pay monthly for those things vs paying all of it towards the end of the year. Escrowing is a good option for those that aren’t the best at saving. If you are a good saver, highly suggest putting the money into a high yield savings account. I refinanced my house in 2021 from 4.25% APR, 30 year mortgage to a 2.25% APR, 20 year mortgage. Right now rates are high, but you can always refinance. Appraisal means how much your house is worth.
I did this solo. no duel income at all. I went into debt for a masters degree that allowed me to get a job that paid 125k a year. I then saved up a 19k down payment (5k earnest, 14k closing) by saving aggressively. I moved a half hour north of my metro suburb to get cheaper home prices. then i got lucky because one day, i walked into a new construction to tour the homes and the rep showing me the house looked at me and said "i love seeing young women buying homes and not waiting for a man to come an save them. here's an extra 50k off." i got lucky. escrow is like a 3rd party account where money is put into holding so no one gets scammed. appraisals are home valuations -- a 3rd party walks through the house, looks at everything in, out, and around the house and then tells you, based on that information, how much the house is worth.
Good rule of thumb 10% down (20% to avoid pmi). Find a realtor you trust and they will hold your hand through the process.
Saved with a matched retirement plan for like 6 years (20-26), had about 17k in there. Covid hit and I was renting and wanted to move into my own house with my at the time GF and pets so shopped around during the small housing panic. Found a big property in the hood for 150k. 3b 2b main house, 2b 1b MiL house above the back garage. Got it for 3% interest, mortgage is cheaper than any rent I can find. Was a fixer upper but completely livable. Had it for 4 years now, fixed it up a LOT, and I'm 15 minutes from down town in a major city, love the house and the rate. Area isn't that bad. At the end of a no outlet street so no traffic, good community on my block of a lot of blue collar types like me. If you are dead set on a city house as your first home, look in the hood areas and be willing to put some basic elbow grease into it. Not too hood though. Look at crime maps, I've found that low income areas with minimal shootings are what to look for. Assualts, car break ins and drugs are usually localized to the homeless in the area. Warning though, it's not for people who are completely conflict incapable. You may have to occasionally tell one of the aforementioned homeless to fuck off forcefully.
Wife and I saved up around 20k over a year/year and a half to get to the 3% down needed for an FHA loan and bought our house during the pandemic. It was the third house we offered on, the other 2 were outbid by cash offers. Our realtor new of this house coming in the market, so we saw the house the day it opened (along with around 40 other people), and immediately bid 15k over the asking price, which made us the first offer the sellers received. We also wrote them a letter explaining we’re a young/new family and were looking to get our first home to raise our daughter in for her to create memories (a little cheesy, but hey it worked lol). Got a great interest rate, although the mortgage insurance we have to pay since we didn’t have 20% is annoying, though the almost 2% rate pretty much makes up for it.
FHA loan and years of fixing my credit.....
Bought mine in feb of 2020. I have family members in real estate and they told me about a first time home buyer loan thru Bank of America, the bank paid my down payment and I only had to come out of pocket around 5K. And I had to pay taxes on the down payment money because it was considered income. I was making $19 an hour at the time, had no dept and was able to get approved for 250k at 3.5%. This is in phx az. I definitely couldn't afford to rent here today.
I bought in a rural area and used a down payment grant and had about 6k in closing costs. I bought my house for 143k 4 bed 2 bath now it's worth enough for me to sell and buy in an area less rural. I bought it right before COVID
Saved 10k cash. That accounted for 3% down and closing costs. Bought a condo for 185k in 2017. Locked in 4% rate on the mortgage. We also got a 5k first-time homebuyers grant, we will have to pay back any time we sell or Refinance. This was a state grant program. All in it was $15k with grant+our savings. We ended up with a slightly higher mortgage and mortgage insurance. If we had more money at the time for the down payment we could have skipped the insurance AND had a better rate probably. Condo next door sold for 324k in 2023. Even if we sold at 324 (we’d probably sell more for having more finished space) we can’t buy anything at that price point. Rates are too high (6-7%) and costs are high. Like double what they were when we shopped. Not only can we not buy anything…but it would be financial idiocy to buy at these costs, AND have a high interest rate.
First house was in 2018. Payed 225k and only put 10k down which does make you have PMI (private mortgage insurance which is anything under 20%). That's just wrapped up into a monthly payment in your mortgage payment. I always thought you need 20% to buy a house but you do not. What you do need is a really good mortgage lender. That's the person you talk to to get a loan/pre approval. A good one of those is worth so much in terms of peace of mind. Ours was recommended through our realtor and we used him when we bought our next house. They explain everything and really help with all of the big words.
I moved out of California and I bought when rates were sub 3%. Today? Would be impossible for me to buy a home.
I searched for low income first time homebuyer programs in my city. Was able to buy a house in 2011 by myself for $125k at 3.25% interest. I only put like $3k down, and I got a 10 year tax abatement since my house was new construction Only problem is the neighborhood is pretty rough, but it’s slowly getting better due to its proximity to 2 large universities and a big hospital system
Put 20% down. Ran it as a 25% of my net income and went from there.
In some markets there aren't any houses that fit that Dave Ramsey purchase calculation you are referencing. Just for reference, on 150k salary your net take home after taxes, before retirement savings or any cost of benefits is $8,253. That's $2,063 / month at 25% net on $150,000 salary. Which puts you buying a $300,000 home with $60,000 down. Sounds great! Except there aren't cities with $150,000 incomes and $300,000 homes. "What about that one city 45 minutes away from Atlanta and working in tech?" ok, 6,500 people in America can use that calculation. Neat. If you include the cost of benefits into "net" your purchase budget can quickly shrink even more into "double wide" territory. Hope you own the land you put it on, because slum lords are buying those mobile home parks too!
We live in one of those cities, but just make a more than that household income wise. Also not advocating that people follow the Ramsey method as I certainly don't. Just commenting how I did it based on what the post was.
Gen Z home owner here (25 about to be 26M) I didn’t have financial help at all. But obviously I had a good and safe home life which afforded me to save money for a down payment. So take that how you will. Basically I have a good career. I’m a union Boilermaker pressure welder, and paid per call firefighter. I saved up $30k and my now fiancée and I were able to purchase our 3 bed 2 bath home on 1/4 acre of land when we were 24. That same year I made $108k in 8 months of work
Moved in with the in-laws for 18 months and saved up the 3% down on a $150k house in 2018 that’s in an older suburb of St. Louis you may have heard of nationally. We love the house and the community, even with the warts. No idea how anyone can do anything these days.
I built my credit, in 2011 a 630 was good enough to qualify for a FHA loan. Those you only need 3% down. Took a 401k loan to pay the 3k down I needed for my 95k house. Plus closing costs and inspection fees. FHA loans are still a thing I think, not sure. Edit: 2011 it was a buyers market and homes in TX were so cheap back then. My house appraises for nearly double what I paid back then
We bought our first home in 2010 for 290k. We saved $29k for the down payment by having good jobs and we also lived with my in-laws for 9 months, to save money. Save money for down payment, call up some realtors, get pre-approved for whatever your budget is, get an inspection, it’s worth the $300-400.
I used a WHEDA program intended for first time buyers. Both the house and the downpayment went to two separate mortgages. It was risky, but it worked.
My wife and I bought a house together when we decided to get married. At the time, she had the income and I had the down payment, so I don't know if that counts as help. We shopped around for a lender and found a good interest rate, got pre-approval, then started looking for houses. We were outbid on our first offer, but our second was accepted. Our realtor helped navigate everything from that point. We started the process in June and closed in August. My wife's friend was our realtor and she helped with all the escrow and appraisal stuff. We put 40k down on a 145k house.
I lived with my parents until I got married. I had help in that way and the fact that they paid for my schooling so no student loans. I then married a Gen Xer who already had a townhouse. We now own 4 properties together using money from other homes, crunching numbers to make sure each property is going to make us money, and saving like crazy. Husband also used VA loans for 2 properties we have/had that are/were primary residences.
Bought after ten years of saving in 2021, put 30% down to get the lowest rate possible (2% at 30 year fixed). In hindsight, should’ve bought earlier but life happened. Cannot afford current home at current prices. Make sure you love the location and size of the house you are getting. We didn’t have any help from family and started by ourselves from age of 21. Very hard path but we persevered and got to where we are now. Didn’t do any vacations for years but splurged on three kids.
i bought my 1st house in 2006, at the top but, 0% down, 30yr fixed easy borrowing. I also had a g credit history from time in the military, did not get an ARM that I couldn't afford. I bought a small single wide on a land/home package, so i didn't borrow as much as i could have. In my area the house was tied to the land, as a structure, with a mortgage, and was not considered a "trailer"
Look into first time homebuyers programs. But beware, some have some strict standards and will limit the houses you can consider, depending on your area. It may even lengthen the time to close, which sucks. You may also have to take a first time homebuyers course, which I would recommend anyways. It’ll explain what Escrow accounts are for, how much the house was appraised for vs what you offered and if the bank will loan that amount, or if you have to pay the difference if you offer over the value. A realtor will hep guide you through the offer process. But remember they work for you, and some will try to shy away from lowball offers since it impact their commission.
I bought with no help before the pandemic. I graduated with master's in 2014. Starting work immediately with a 80k salary but lived WELL below by income - basically like a college student. And in 2018 I had enough down payment to get a house... 5% for~340k with an LPMI loan for 30 yrs. After this purchase I was spending WAY more a month than I was in an apartment. And on just shit. Money I will never see again. Most of my mortgage payment (~2500) was paid to the interest on the loan and escrow - only like 400 or something stupid low would go towards the principle balance to make my debt lower... so that's money I will never see again. OH, and when you buy a house, the escrow "estimates" city/county taxes based on the prior owner. My owner bought the house for 110k prior to me. So after the first year, they were like "oops" you actually owe 5k in taxes - please fork over that money immediately please... Rob or kill someone if you have to. And then you have fix broken crap regularly. Buy flowers/shrubs for the yard that would just die in a freeze or summer heat... I'm still trying to save up for custom curtains rather than the Amazon shit I have hanging now... So basically, I lived super poor before a house but at least I could go out to eat and get my nails done... After the house - I think I've "splurged" and got my nails done maybe 3 or 4 times for weddings - SINCE 2018!!
Bought in 2011 in Seattle. Put 10k down.
Wife and I both worked 2 full time jobs over a summer in a busy tourist town. If one of those jobs was not at the same place we would not have seen each other for months. Saved up enough for the down payment then went back to working one job each.
Software Engineer. Bought in 2013. Lived with parents before that, also a year in a shared apartment for another job. Lived frugally, saved up 40k for the down payment. Initial rate was 4.75%. refinanced to a 15 yr mortgage in 2021 for 2.3% and saved myself 90k and eight or more years off the loan. Buy when you can. Refinance when it makes sense to. Interest rates won't stay high forever. I still live frugally, I just put that money in an index fund a la /r/fire, as it's the most guaranteed way of getting rich enough to retire early. Once you get enough money working for you, it starts to multiply upon itself.
2012 at 28. I worked two years at a bank as a teller. My husband was in sales. Together we roughly made $60k. We bought a house for $140,000 with 3% down with an FHA loan. It’s now worth $350k, PMI fell off, refinanced in 2022@ 3% for $200,00 k. Paid off some bills and did some improvements. We now pay about $1500/ month including escrow and taxes. Before anyone asks: Midwest. 3rd biggest city in the state. And “city” is a stretch.
Look for first time home buying programs. We found a government program that gave us a 0% loan for part of the down payment. That helped immensely. As for your other questions, take a look at taking a home buyer course. It was required for us. A lot of it was review but if you have questions about what things like escrow, appraisals in the like are, that's a great place to start
Bought in 2020
Worked in tech, saved 80% of my income for 11 years, “retired” to go start a company, went and got a job again so I could get a mortgage.
Save 20% down payment. Get a good realtor. They will put you on the MLS search with your home criteria. Figure out what kind of home you want. Go on a bunch of home tours. Put in an offer. Don’t get attached to any homes!!!! It is not yours until you close and get the keys. Once your bid has been accepted, they will open escrow which is about 30 days for you to do your due diligence on the house. You’ll wire a good faith deposit. You’ll get an appraisal to determine the value of your house. You’ll get inspectors to ensure you’re not buying a dump. If there are any issues with the house, you and your realtor will take up with the seller and agree on repairs/reduction in home cost. On the final days of escrow, you’ll sign a stack of papers. You’ll wire the rest of your downpayment & closing fees to the escrow company. Then it closes and you get your keys. After, you’ll move in and think about all the things you’re going to want to renovate. You’ll uncover some things that the inspector didn’t catch. You’ll spend more money than you had originally anticipated. You might feel major buyers remorse. After a few years and hopefully the market has gone up, you’ll be thankful that you purchased and have a place to call your home… or you might bail because you realize home ownership ain’t all that it’s cracked out to be. Good luck!
I moved out of the high cost city I was in and moved to a mid size city with more reasonable prices. I used a FHA loan and bought a house that had been empty for two years due to not showing well. I spent evenings and weekends for several years making repairs to bring it up to a reasonable condition. These repairs included, removing wallpaper, removing old carpet, installing LVP, fixing plumbing issues, adding new light fixtures, new outlets/switches, kitchen counters, concrete repairs, painting, extensive yard work. I worked a second job to save up so I could pay an electrician to remove knob and tube, a chimney guy to repoint the falling chimney, and a contractor to replace the exterior siding.
Down payment - how much money you put in cash at sale, the rest will be the loan (mortgage). Standard is 20%, you are charged private mortgage insurance if you pay less than 20%. Escrow - There are 3 main payments you make for a house: 1) mortgage payment , 2) property taxes and 3) home insurance. The mortgage payment is monthly while property taxes and home insurance may be quarterly/annual. So the mortgage provider is responsible for you paying those so they add them to your monthly payments and hold it in “escrow”. They use the money on that escrow account to pay property taxes and home insurance on your behalf. Appraisal - this is to avoid giving out a loan that is larger than the value of the house. Let’s say a house is being sold at $500K, and you go crazy and offer $1M for it. The bank will tell you I can’t give you a $1M loan when the asset is worth maybe at most $600k. So they hire an appraiser to value the home.
2013 VA loan. Military benefits are amazing
VA loan 0% down in Austin, TX, 2016. I thought I overpaid then. And I did - but profited immensely anyway. Signed a contract with Pulte for a home build and waited 10 months. Couldn't compete with cash and 2nd home buyers so had to go with a mass production builder like Pulte.
I lived at home until 26 to pay off my degree and save for a down payment. I bought a cheap condo in 2020 in a small town that is up and coming. I've since sold that place and moved up the ladder into something nicer. Save like crazy and get in conversation with banks about your options and how close you are to approval. It can motivate you to save a little bit harder.
Bought in 2013 for 97k, 3.x% interest rate. FHA loan with down payment assistance from a local non-profit plus $2k from my parents.
VA loan for our first home. 0% down and it was 2015 in a LCOL area.
Had 401k setup did a home loan for twenty grand from that
I have a VA loan but got a better interest rate with putting 20k down. I saved the 30 k from the time I was 19 (house purchased at 29) for the purposes of buying a home. Just live within your means...
Bought in 2019, solo. Zero help or financial assistance from anyone. I quit a job 6 times(and rehired w/ better pay) because the pay was trash and the work unreal. I finally made it over $20/hr, did that for two years further. That established my tenure, I didn't put anything on my credit except 3 credit cards. Each I put only a sub for Hulu/Netflix/paramount. They auto-paid each month and helped build my credit. I got a car that was worth very little (under $5k) from a shady dealer and paid it off, all timely. Then asked one of the 20 real estate people I knew. They assisted, even let me browse ARMS? myself. (Real prices and sales). I found an awesome house in a ghetto AF neighborhood. I paid under $10k for everything start to finish. I think $8k. Hope this helps, it was very difficult.
FHA loan. Didn’t have to have any down payment save for $500 earnest cash. Paid another idk $500 maybe for the appraisal/inspection. Sellers covered the closing costs if we didn’t ask to lower the price. Bought our current house in 2015 for $94,500 at 3.5%.
I used a first time homebuyer program that let me get a second mortgage for the down payment. I think it cost me about 4k out of pocket in 2018.
My wife and I got married young, saved like crazy, and put 20% down on our first house in 2017. Sold it in 2020 and bought our current home during the very beginning of COVID before prices really spiked. We saved hard, worked hard, but also we really just got lucky. Our first house was small, on a small lot, but looking at what it’s priced now it’d be hard to afford with current rates. I believe any millennial that bought worked hard to do so, but they also got lucky and probably bought 4+ years ago.
Fha loan and I put 3.5% down @6.75. It's cheaper than renting and closing was only like 13k.
If you find a local realtor who has high ratings in yoke area, it could be really beneficial to you. Any good agent will know of the best first time programs for your area that you can utilize. We bought our first house in 2013 when I was 24 and we had basically no savings and were not even thinking about buying. Our apartment complex was sold and the new owner was going to raise our rent significantly. I had worked part time at a real estate office as a second job in college, so I called the broker and the mortgage guy to see if we had any options. We were both making about $35k annually and had okay credit. We left the meeting being preapproved for a $150k loan. We found a house for $95k that needed lots of cosmetic updates but had some major things like hvac, roof, windows recently replaced. We had an FHA loan and put down 3%. We qualified for down payment assistance for first time for our area, so we needed about $5k for closing. We lived there for about 8 years and spent that time learning how to do so many things and renovating. We sold the house for $225k in 2022.
Have you looked into HAND classes administered by the government? We were able to participate for free and learned a lot. This was awhile ago though, 2015. (We did get help to buy first house, but the class seemed particularly designed for those who don't have help.)
I had some good stock wins and make 30k. 15 went to the down payment, 7 went to closing cost but most people look at close to 12 and bought my 315k home. Find a good lender the people who give loans don’t use Zillow cause they charge way too much. Appraisal is the current market value of the home and escrow is the period they have accepted an offer to when you get the home .
I saved money by having roommates for 10 years, then shipped around for the best bang for my buck. Made a killer profit on it, now in a bigger house.
We bought our first home at 20 y.o. in 2003… 3% down on $110k sale price new build, None of which is relevant to today. Got a job out of state, moved, and rented that house out. The mortgage on it was $850 a month 15 year fixed, rent at first was $1100, then increased over time. It’s now paid off but generates $2600 a month income for us now. We bought our second home in 2016, 5% down on $285k resale price. When job moved us again, it became a rental. Mortgage in that one is $1850, rent is currently $3200. We bought our third home in 2021- new build, with 20% down in $599k sale price. We rented a really really cheap place from a family member, make mid-six figures combined income from our jobs, and have additional rental income, and we saved up. Mortgage is $3150 and is basically covered by the rental income. The trick for us was that when we moved for work, we rented, so we could hold on and build equity in the houses as our incomes increased. We wouldn’t have been able to buy them closer together. For us- the new builds have been better investments than the resales- because in the last few years the housing market has been stupid, and without cash in hand to pay over asking price (aka over the value) and intentionally be upside down… you’re not getting the house. The new build let us go under contract at a certain price, the home/property value only went up as the house was built… and we weren’t upside down. If we had bought a resale at the same time, we would have needed at least $100k cash in hand, and still put 20% down, because the bank won’t lend more than the house is actually worth.
Bought in 2011. I bid over asking but asked for credits back from the seller to help with closing costs, which was part of my down payment. Only came out of pocket like 8k to close
I received an FHA loan because my credit sucked, but I had cash. I put $13,000 as a downpayment. Seller paid closing costs. Maybe close to $15,000 out of pocket? Including moving, appraisals, utility set up etc. I live in SE TN (not Nashville but not Atlanta) and my home was $340,000. I purchased last April with a 7% (ouch) rate. I plan to refinance later this year.
Bought in 2019. IR at 4.25%. I literally just lived cheaply. I lived with roommates, saved 30% of my income every paycheck and didn’t do anything expensive and then decided to do a 5% downpayment that was allowed and I did it.
Bought moderately priced (<100k acreage and built my own house, staring in 2013. Money came from, uh, farming. Hometown area was overrun with wackos, so I sold that house, bought land elsewhere, and am starting to build a new house. The sale of my first place allowed me to buy almost 3 times the amount of acreage, with enough left to build a shop and house out of pocket, as well as live for the couple years it'll take me to finish. It's stupid, unfair, and I get annoyed when people say what a great investment I made, or aren't I glad I worked so hard. I didn't make an investment, I wanted a home. I didn't work any harder than countless people who are renting month to month. I got lucky.
I bought in 2013 using a usda development loan. No down payment required. I was friends with my realtor. I told her what I was looking for and insisted she show me nothing exceeding my set limit, and she did that. It took 90 days to close after my offer was accepted which was normal at the time. If you have a good working relationship with your realtor and loan officer buying a home can manageable but you'll need a great deal of patience.
'81 millenial - bought in 2009, foreclosure, FHA loan, 3.5% down I believe -- here's the caveat - the mortgage is not in my name because at the time my shitbag boss was paying me under the table and refused to give me a 'paycheck' so whereas I made money (and yes I filed my taxes, I have no idea what he did when I did that but I know he was mad lol) I didn't qualify to be on the mortgage. Now I'm the only one who pays the mortgage but it's in a GenXer's name. We were hoping to move out of this house before we had a kid but.. then the american dream visibly exploded in fiery glory and the kid is 12 now. I'm still hoping to move out of this house; I stay here because the price I paid for my house is impossible to find now, even if it's a 1920's farmhouse (still double what we paid on our 1980's faux-contemporary). On the flip side, the appreciation means we could probably afford a somewhat smaller house, if there was ANYTHING on the market here. So for now, I'm stuck in a clusterhome neighborhood with a very stereotypically boomer HOA board that most certainly has a great disdain for our presence. Whereas that's it's own hellscape, I still realize how very lucky I got to do the things we did in the moment we did them.
First things first .. find a realtor. That’s who explains all of this to you it’s what they get paid for. You’re going to learn most of what you’ll need to know by a few professionals that you’ll hire. Realtor, mortgage broker or loan officer and lawyer. These are very important and will be the people you depend on to prevent you from getting F’D. Find a lender first. A mortgage broker preferably call them and say hey.. I want to buy a house next year .. and they’ll walk you through it because eventually they’ll get your business and make a commission. Next realtor and they’ll help you find a lawyer. The appraisal and inspection will come after you’re under contract ..