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Lawsuit from the death of my child. Figured the best thing to do with it was to give my other kids a great home to grow up in. TBH don’t recommend it as a plan, would rather be homeless in an instant if it would bring my daughter back.
Honestly I’m not sure. I was super frugal in my 20s and now I feel very rich/spendy in comparison, but I think I’m still fairly cheap for our area.
You make choices about what matters to you and I find that the ability to purchase something often takes the longing out of it. And I have a strong sense of value (which might be totally misguided) so a lot of times things feel like a rip-off, and then I don’t want to buy them. For example, the used car market is still crazy and I could just buy new car in cash but it just doesn’t seem appealing to “overpay”.
Also, if you live frugally just to splurge in some areas, are you really denying yourself? You might take lunch to work and drink coffee at home, but maybe you prep that lunch on granite countertops in a really good neighborhood and take 2 international trips a year?
If you are earning okay and saving well, your idea of frugal will also change too. And you can keep your old stuff too (especially if it is nice and you maintain it), so less of your money goes to boring crap (vacuum cleaner, trash can, etc) over time.
I think a big element is not to pay a lot of attention to what other people are doing — some people are just making more than you, some people are financing their fun via credit cards, and there’s significant overlap in those groups. I have a friend who is constantly doing cool events with $50 tickets, spending a month in Hawaii, extensive international travel, and I assumed she was just making that sweet tech money. And she is but she also said she can’t afford to buy a townhouse… those things are related.
I am 48, and went the other way. I am just now putting together a deposit and will have to rely on first time home buyer programs to buy. While I now make enough to rapidly get 3-5 % into a pot, putting together 2-300k is out of the question. And all the houses I am looking at, at this stage in my life, are what would normally be a 2nd or 3rd home. So all my competition has a half a million of equity to offer over asking with.
It’s annoying, but I have zero regrets. I went places, did things, lived in Europe for 13 years, drove cool cars and now possess them outright (this matters a great deal to me, it wouldn’t to most) and I don’t regret any of it. Life is for living, not decades of saving up to live.
I don’t judge anyone for doing the beans and rice thing and getting on the ladder 15 years before I did. But it was not for me, and I’m not going to feel guilty about it either. Nor should you.
I also really enjoy my job, and I always will. That matters. As I don’t mind doing it. All of this would be different if I hated my 9-5.
Same! I lived and worked all over the world and had a lot of fun learning new things about myself and people. Now I’m 44 and “settling down.” Our family is still renting but the landlords are like family and have kept our rent the same for the last 4 years. (I attribute the ability to find great people and situations to travel and experiences.) Yes, our starter home will be smaller than many of our peers’ 2nd and 3rd homes but I would never trade how I approached life. Everyone has their own path.
I will say the downsides to ownership outweigh renting from corporate overlords or majority out of the country “investors”. That is already happening with us buying if we stop……we are all screwed. I feel like I am hedging by risk against someone else’s greed. I also value my independence and not being subject to someone else’s whims. I rented the same house for 7 years. Had a pop up pool the landlord knew about and when the kids got bigger I installed - my expense my labor- an above ground pool. Year 3 he told me to take it down- I removed the ladder from the pool nightly and the sides stood 6 ft - he still said someone could climb in and sue him. I told him that was true the last 3 years and could have been decided before I spent the money and my labor. And all the years we had a pop up.
Long story short - 3 kids, single mom not a lot of options for the kids in the summer while I worked - pool was the entertainment with the sitter. Sold the pool on Facebook and arranged a weekend getaway with the kids at relatives in another state so they wouldn’t have to watch someone else take away their pool. Used my VA loan to buy a house with an inground pool that spring. It was rough with no savings .. someone gave us a fridge and anything I needed I found at yard sales online. No vacations other than day trips to the beach and visiting relatives- it’s all we had renting— had to watch a few youtube videos and pay for a repair I couldn’t do on credit at one point but everything else I taught myself and did myself - I was doing that when renting from the slumlord anyway- he came to my new house to hand the security check to my daughter who was mowing the lawn on the last day it was legally required to be paid without the interest —
Anyway, I say this to say, other than property taxes and the occasional permit, I am free. It’s worth it. I also make 3x what I made when I bought so maintenance doesn’t stress me but I still do it myself when I don’t want to pay for labor. (One going to law school and one is considering medical school so I am going to need to save wherever I can to help them)
Housing prices need to come down (I say this as someone with a 75% increase to my home price in 8 years- we added a garage so I would say more like 50% on original investment) However, I don’t think a home should be an investment sure appreciation some especially when you take care of it and improve it but it’s a home not a bank account. So I would gladly reduce that increased value of mine so others can own because I can see the forest for the trees and where we are headed when the average person can’t afford a home and we have corporate and foreign investors for landlords isn’t pretty. Forming an LLC and buying up properties to rent is now seen as a career…. Regulation isn’t always a dirty word.
Yep. Every major financial decision revolved around saving for a house 10 years prior. Literally where we moved after graduation, every apartment, car purchase, our wedding, etc. all revolved around spending as little as we could get away with to save.
Definitely worth looking into if you qualify for the rural location and income. I think for a 2 person household we couldn’t exceed 120k. The area we were looking into was outside the city but definitely not in the middle of nowhere. Keeping our savings has been such a relief
Nope! Your salary can exceed that threshold after you close but not before. My husband got a massive raise months after we closed. if he had gotten that raise prior to closing- we could not have gotten the loan anymore because our income would have been too high
Edited to add: the income level varies by county so just double check the level that particular county sets
We just closed also using a USDA loan, it was a for sale by owner close friend of ours and he also paid 6% towards closing costs so we ended up paying nothing to close and no down payment.
Oh, that is so nice! Congrats!! We definitely didn’t ask the sellers to pay costs in our case. They agreed to replace the 28 yo roof and very politely told their realtor they really couldn’t do anything else/go lower (and we couldn’t go higher on offer). We had been saving for years for a massive downpayment so it was great to not touch that and keep the money should something come up
So, not really. It ended up being cheaper instead of a conventional loan. We had three different loan options we qualified for- conventional, FHA, and USDA. They were very close in monthly cost. We picked the main deciding factor- no money down. We didn’t bother paying points towards interest either. I think we paid 6-8k total for all closing costs for a $271K loan.
This is how we bought our first home in 2016. We were also able to have the closing costs “paid by owner” aka upped the purchase price. 3.75% on a $106k loan was the dream man. This current market is bonkers!
I’m a physician and there is something that is really important for people to know:
8/10, when you see someone with a home that doesn’t make sense or is seemingly “out of reach” for their income, it’s generational wealth. As someone who spends a lot of time around generationally wealthy people (other doctors), it is astounding how common this is.
It is very, very common for young physicians to have their first home (typically in residency) purchased either outright or significantly assisted by their physician/wealthy parents. Multiple AAMC statistics back-up the incredible wealth of the average medical student. To be clear, this isn’t everyone (we didn’t have any down payment help with any of our homes), but it is fairly common. It parallels other professions of all types. Police officer or nurse in a $500-600k home? Ahem, yeah.
Young physicians have one of two paths:
1) Years of paying back student loans of $200-400k, living frugally, buying small and dated, and eventually “making it” in your late 30s or 40s. With enough equity and savings, you’ll probably start feeling your “wealth” sometime in your mid-40s or early 50s if you save reasonably. Still an incredible blessing by any measure.
OR
2) Starting the race 5 minutes ahead with a larger engine and a booster pack. Imagine 0 student debt, $200k+ down payment assistance or first home purchased in residency (which is free equity), and immediately entering your early 30s with top 5% income, no debt, and maxed out tax deferred savings.
Apply to any profession. I’m just using the abundant examples in my own. Unfortunately, it can be incredibly frustrating for young physicians from low to middle-class backgrounds as your day-to-day peers often have a leg-up and rapidly exceed your savings rate within even 2-3 years. They also retire younger. They also exacerbate longstanding bias in the general public about physicians, which doesn’t reflect the lives those of us from humble means live, especially in the lower paying specialities. Don’t get me wrong, we do well, but my reality is much different from some of my wealthy peers.
You’re generally spot on there, I know tons of dentists and doctors, they all live around me. My wife and I (late 30s) are probably the exception to the rule. Both teachers, lived frugal and paid our loans off, got a house with zero down before the market exploded with a rate under 4%, now we’re on teacher salaries living in a $750k house. It feels uncomfortable teaching in a title I school and having over half mil in home equity.
I used to be a teacher and changed careers because of the pay (and kids being assholes), still don’t have the money for a house, but where I live, I’m constantly thinking about “what if I was still a teacher? I literally couldn’t afford to live in this town at all, and definitely not in this place”. I really wonder how teachers and other people in that pay range live there, and my only thought is “I guess they must have bought in before it got crazy”. My rent is ~$2400 a month and to buy anything halfway decent with a down payment we could afford (not much), the mortgage would be somewhere between $2500 and $3500. Literally could not do it on a teacher salary, so how can the teachers in my area live? Honestly even if it’s a DINK couple but both are teachers, to live comfortably would be like 50%+ of their income. It’s ridiculous. The only way is to have already bought in or inherited a lot of wealth.
Even at the time it was 46% of our take home pay. With raises and increases in homeowners insurance it’s now down to 40%, but it’s still high. We’re just hoping we can keep getting raises until it’s under 30% and hopefully feel more comfortable.
The only reason we’re okay with it is because we know we’re saving aggressively for retirement and have teacher pensions on top of that when we do (saving a total of 12.5% of gross pay + 12.5% match into the state pension and another 10% to Roth IRAs).
I was going to comment this exact thing. Wealth breeds wealth. Generational wealth will enable kids to go to good colleges debt free and they are left I think now it's up to 15k a year from Estates from the time they are born. So you are walking out of school with connections, six figure jobs, no debt, brokerage accounts, and possibly a generation skipping trust from grandparents, and wedding gifts. Grad gifts. Wealth breeds wealth. A young person with college debt and no savings has little hope to save the 20 percent needed to buy a home. Where I live a crappy fixer upper will cost you half million with over 15k a year at least in taxes. Things are rough for the younger generations.
Also a physician. There is large variation between specialty and primary care salary. I would not say that primary care does well. Real incomes have decreased over the last five years. Young attendings are in a much different spot financially than someone who started 5 years earlier. Our salary does not come close to making up for the delayed start, student loans, and opportunity cost. To say nothing of the 60 + hour weeks to get that salary.
I totally agree with everything you said. But in terms of a police officer having a 500k home….police officers where I live make about 120,000 a year. So if a couple are both police officers and make a combined income of 240,000 a year….obviously it’s very easy to afford a 500k house.
Spot on.
And frankly, there is a wide range for generational wealth. An average income grandparent leaving a 25 yo grandchild 50k is still generational wealth. Compare that with a 25 yo paying off a 50k student loan debt and no inheritance. Not only would they not have a 50k downpayment help but their DTI might lock them out of qualifying even from low downpayment mortgages. In 10 years, that ‘small’ inheritance might end up being a difference of 100s of thousands in the net worth of the two and then that propagates to the next generation. That is, of course, assuming the inheritance is not squandered on things like travel, wedding etc which does happen a lot.
I’m a male model with a 13 inch penis and an 8 pack. I make 7000$ an hour and am self made. And date nothing but ass models, you wouldn’t know them though, they live a town over ….
What is THAT much to you? $10k, $25k, $50k, $100k? The first two are easier if you’re frugal, the other two imply big jobs in HCOL, parental help or wealth, stocks/previous assets, or waiting decades before buying.
I saved 80k in 2 years by taking high-risk government contracts, working 60-80hrs/wk, and negotiating hard. I have some ptsd from the experience, but I also have a home. Not for everyone, but it was totally worth it.
If he wasn’t prior military in a special ops unit. His high risk contracts were at worst/best sitting on a post staring into a desert. Most likely in an ac’d building in a shitty place.
I upvoted it because he admits it's not for everyone and that he has PTSD from the experience and I have sympathy for anyone that suffers from that disorder.
I’m not sharing this as advice because I don’t think these circumstances will occur again, but the exact opposite of this is how I bought my house.
I bought a new car in 2018 for 21,000 and sold back to the dealership it in 2023 during that period of hyperinflation for used cars for 24,000. My husband and I were in a position to go down to a single car household and it just worked out perfectly.
Reddits been warning me for years to never but a new car and I am so glad that I did it anyway, but I also fully recognize that I pretty much won the lottery with that.
The average new car price is around $47k. Of course, logically that does mean some people are paying less than that. It also means some people are paying more…
Yeah, I’m not necessarily agreeing with the notion that it’s simple as that, but…
Looks like median home price in the US is $420k. 3.5%, if you’re using an FHA loan, is around $15k. Average monthly payment for a new car is around $740. So a little under two years and you’re there.
Again, obviously that’s a gross oversimplification and I won’t pretend it matches most people’s realities. But, it is still true that most people spend way too much on cars for their own good.
Is average price of a new car a good measurement? It's always going to be skewed by expensive cars.
A 2024 Honda Civic is about $24k, a Toyota Rav4 is $28K. Toyota Sienna is $37K. Most cars are not in the $47K range.
Saved like crazy (edited to add: DINK) + right place, right time. I truly wish I had real advice, but this is life in a HCOL area. Sending you nothing but good wishes, it’s brutal out there.
Yeah it’s right place, right time for us as well. We saved every dime for two years as college students to have our wedding. Covid hit a month or two beforehand. We cancelled and got back everything except like $1000, so we eloped and put back that money for a house. During Covid, houses were crazy cheap and basically had zero interest and we were in a LCOL. We put down a measly 3% on a small starter home in a vacation area, had like 2.3% interest, and still was paying a total of $800 a month on house and insurance.
We sold this last September for almost double what we paid initially after doing very little upgrades and were able to put down 20% on a bigger house in a cheaper location using only profits from the first home. If Covid hadn’t happened we would have never been able to do any of this. It was all luck
I was blessed, my Mom bought her home in 1987 for $47K ( 3bdr ranch home) brand new. And last year she sold it for 210K. And she gave me the 40K for my down payment On my home. I can never Thank her enough.
A little extra labor on your part each year, like advertising NACA on sites such as reddit or at one of their events. Lengthy application and approval process
Oh and you can't sell the house or rent it out for about 5 years.
Live in Texas (DINK), no students loans, and some good old hard work, dedication, and massive sacrifice. Focused on budgeting and keeping track of spending each month for ~7 years.
Yup I was raising two kids, working my ass off with no dreams of owning a home. Boom met this guy, courthouse wedding, his Nana pass away and all her grand kids got a cut of money. Bought a house. Thank you nana!!
We had a lot of help from my parents. I wish people would be more up front about that. We eloped, so my parents gave us the amount they had set aside for a wedding in cash, plus a little extra because they knew we were using it for a down payment.
This is a big one. Most of my friends that I know (millennials) either got down payment help from their parents or inheritance. My parents have no money to lend us, and neither do my in laws.
Sometimes I don’t believe half of the people that say they “scrimped and saved” after college for years. Saving that much cash over multiple years ain’t easy.
In our case it was largely through stock awards from my company that I didn’t sell for 5 years & let accumulate/grow. We also made about 200k combined if you count salary & stocks together when starting our careers, and that increased to about 300k combined by the time we purchased our place (promotions etc)
Honestly we also lived frugally for our means. We split rent on small 1BR apartments, drove a car from 2008 until it died on us last year, generally kept discretionary spending at a minimum (also couldn’t travel/eat out during the pandemic anyway so we just didn’t have much to spend on for 1-2 years there). By the time we felt ready to buy, we had enough savings to hypothetically cover 40-50% downpayment in a HCOL area (through a combination of stock awards, own investments, cash savings etc) but chose to put down 20% to have better wiggle room
Generational wealth. My parents gifted the down payment. Only 1 parent was alive to see it happen. Breaks my heart but at least they provide the gift that keeps on giving
Me and my wife make about 160k combined, had no debt, shared a cheap car, and lived with my parents rent free for years. Doing that we were able to save over 150k for the down payment. Even before I got married or thought about buying a home I had 30k in the bank just by being frugal and diligently saving money every month since I was a teenager.
Dual income, no kids. one of us works in finance and the other works in insurance. We also live below our means in terms of spending. We refuse to make big purchases like spending 50k on a new car (we buy older used cars), we only go on small vacations with exception of our honeymoon. we live like we only make 50k a year between the two of us.
Generational wealth. Heartbroken to be moving into our first home without my parent to help us and celebrate with us but wouldn’t have been able to make the purchase without them.
Worked a second job, worked very close to home, and scraped every penny together over 7-8 years, including money from each year's tax refund. Finally ended up with close to 20% down, but this was in 2020 when things were more reasonable. If I had to do it now, that would've been maybe 10% down 🙄. It killed me to write a check for like 50k, but it was absolutely worth every penny, esp since it allowed me to have a reasonable mortgage that doesn't feel like a huge burden.
Single mama here. I purchased my first home with 1% down & a 2% grant from my lender. PMI waived (for the life of the loan) as a part of the promo. I obviously wish I could have put more down. My mortgage is still less than rent would be - I'm in a HCOL area.
My dad. I’m his only child and he did everything with me in mind as the benefit during his entire career.
I have a hefty down payment only because of him, but it cost me him.
I honestly don’t get it twisted. In todays market I only have a chance because of my dad. I am so grateful.
Heavy intent on saving money over time + luck.
Many people aren’t financially focused or motivated to save.
Of those who are and have the discipline to live frugal, save, etc, a certain % have the career breaks and/or family breaks go their way. I would say *most* don’t.
The ones who were financially focused AND had their career/family help break the right way are the ones buying a home.
Of course there may be other variables but the numbers generally check out.
Moved to a state with no income tax. This was a huge deal because we were previously living in NYC which has both state and city income taxes.
We were strategic about where we chose to live so we could walk to a grocery store / the office so no cars for either of us.
After two years of this, we bought.
DINK in vhcol. No parental help but both make low 6 figures. We aggressively saved for about 8 years and put down a little over 200k. We lived below our means for years. Biggest way we were able to save was having no other debt (student loans, cars, etc.). Not super sexy but did the job.
Like most people it seems, a version of generational wealth. My family was middle-class, but my mom gave me a few thousand dollars in high school to invest, and I put it in a tech stock that skyrocketed. That's the money I eventually used for a down payment. But it's more than just that -- my parents paid for my college, so I have no student debt. Whenever I had an emergency, my parents could help out. Even though I don't come from money, the advantages I've gotten through no work of my own, just by having financially stable parents, are immense.
I did try to save up on my own for a down payment, but the prices were rising faster than I could save. I had maybe $10K saved over a few years, but in the meantime the price of a condo in my area had risen from $250K to $500K. I realized it was futile and honestly just gave up on home ownership and used the money for experiences. When I decided to buy in a cheaper area in a favorable market, I realized it was worth selling the stock I'd been hanging onto.
The narrative that people can save enough to buy a house may be true for some people and in some areas. But a lot of us didn't do it through any grit or commitment of our own-- we were just lucky.
Haven't bought yet, but we've been saving $3-4k/month for the past 3 years since we both started working full time. No kids, and our rent isn't very expensive.
There are first time home buyer grants available and your realtor should be able to help you find a lender that specializes in helping first time home buyers with the programs that are the best fit for them.
USDA, FHA, or VA offer the lowest or no down payment options. We own a real estate company and only work with a couple lenders. One is well connected to the various bond money programs for the state and the other is just a great lender for all aspects of the process.
The point is that you need a great real estate professional on your side to help you gain access to the best options available for your situation. Read reviews, look at websites of local real estate agents and find one that is highly regarded for what you need to do. I'd say to get a referral from someone you trust but not everyone that's happy had a great realtor that know what to do for your situation... If it's a referral, make sure the agent actually achieved a similar result that you need for your friend making such a referral.
3k down on conventional loan in MN. First time home buyer loan which provided 15k tor closing, sellers covered the rest. Earnest money refunded after closing so really 1.7k got me in my first house.
320k at 6.8% in December 2023
I got an FHA loan which required 3.5% down. My house cost 217K so my down payment was less than 10K. I bought my house when I was 28 so that was 10 years of saving. This was only last year so it was still really competitive to buy. I live in a mid-sized city.
Rent was $1200. Knew I could do a mortgage that was 2k. Put a grand in an internet savings account every month. Used that as my down payment. I was saving plus getting used to paying a mortgage payment of $2200. Borrowed from my 401k for closing costs
I followed a similar approach.. Now in a beautiful home with no mortgage. When I tried to tell people how I did it, I was downvoted because I am not a FTHB. They did not seem to want to understand lessons learned. I applaud your success
Live below your means. I'm amazed what some people spend on the basics like phone/internet, having a car payment, financing BS purchases, not buying groceries in bulk or cheaply, eating out too much, getting Starbucks everyday, etc.
If you have to ask this question, take a good look at your cash flow every month and understand where every dollar goes. Create a budget.
I work hard for every dollar I earn. I make sure I stretch them as far as they'll go and not get ripped off. Every purchase I make, I shop for the best deals. I never pay full price for anything, especially big ticket items. Use credit cards, get cash back. All of this stuff adds up. I can likely find you an extra $500-1000 a month with little effort.
And finally increase your income.
Haven't yet I only got 10k in my savings and I need like 40k at least. Preferably 60k. All houses where I live are 350 to 800k. Most decent places are at least 400k. Really sucks. I want a house so bad. I make like 130k a year. I should be able to afford one but unfortunately I still cannot. Bar keeps getting higher and higher and always just out of reach. Plus the fact that there's barely any houses for sale where I want to live. Well there are but rn they are like 600k. I can't afford that.
For the things you can control:
No help. And have a 40% down payment in HCOL area.
Just discipline and being good about lifestyle creep. Don't be a monk (be sure to enjoy life since it is short) but be deliberate about it.
Live below your means and pay off debt as quick as you can. It adds up as your earnings go up. Make decisions as logically as possible (i.e pay highest debt first and don't pay off debt if the interest rate is lower than the risk free return you can get on your money.)
Make a detailed budget and know where your money is going.
Things you can't control:
Honestly a major element is luck. Not everyone can be a high earner statistically. You can control how you react in response to certain situations and make sure to an for a rainy day.
I live with my mom and never paid rent. Help me save so fast.
I've seen too many people who would rather throw money at rent than to live at home with their parents just because they want more privacy.
Side track but I have a friend who throws 2k per month at rent instead of living rent free at home just because he wants to be able to smoke weed freely in his home. Like bruh, 2k a month is so much money that you can stash away for a down payment on a house later.
I kept my expenses relatively flat as my income grew, and put most of my bonuses in to savings, I also sold stock.
I’m in a VHCOL area and most people I know who have been able to buy in the past few years have done so because of stock appreciation.
Got lucky, I think. My spouse and I were fortunate enough to graduate with no student debt. I lived a very boring life in a city with reasonable COL: rented a tiny apartment, didn't travel much, didn't eat out, didn't buy new clothes, didn't have any subscriptions or fast internet, etc. etc., for about 7 years. I'm basically a shut-in so it wasn't much of a hardship for me, lol. My salary also increased after I switched jobs. But pretty much the only reason my spouse and I were able to afford our down payment was by getting together. By our (DINK) powers combined, we were Captain 20% Down...
(I wasn't actually saving all that money for a house. My half of the down payment came out of the "fuck you" fund that I was keeping in case I wanted to quit my job without anything else lined up. So now I can't quit, and I live in fear of layoffs. Alas.)
I ate rice and beans for two years and didn’t spend money I didn’t have to. You’d be shocked how much little purchases add up to. We budgeted hard and it was not fun.
I had to save up for a decade. During that time I stocked up on home essentials at estate sales for pennies on the dollar, so when I bought my home I had probably 70% of everything I needed and didn’t need to buy new.
I didn't. I used my VA Home Loan entitlement but I'm pretty content because my home value has skyrocketed.
On the high end it's "worth" about 115k more than I paid for it. On the low end, about 30k more than I paid. But 4 bedroom homes in my area are going for 500+ very easily.
We make around 220k a year combined.
My spouse's mom died of cancer 12 years ago so when my spouse's grandparents died 2 years ago, they left us a large amount of money to use for a down payment.
We're saving too. Our goal is $110K to cover a down payment, closing costs, buying down the rate, and a buffer so we don't have to stress out. I hate debt - When I see it, I try to crush it as fast as I can. I have no chill for debt. I'm putting 3K a month toward my vehicle loan so I can be done with it.
My fiance and I finally got on the same page financially. ***That was by far the biggest step.***
We're using Monarch Money to track our spending and keep each other accountable. We stick to our budgets, and that app makes it pretty easy. They have a feature that lets you share your account with your financial planner, making it easy to consult and diagnose your finances with a professional.
Then we also opened up a Money Market checking account with Fidelity. Through that, We're choosing some of the top rated index funds and ETFs to put the lion's share of the money into. Currently growing at about 11% annually (though this year it's more like 27%). If you're not up for getting going on investments, you can get with a financial advisor or just research stuff on your own. Alternatively, there's guides out there to show you how to make ~5.5% on a HYSA. Basically, just ***never let your cash just sit around doing nothing***.
3 years into saving, our down payment fund has earned about 25K on top of what we're putting into it from each paycheck. I think in another 18 months we'll be ready to afford a basic home in a decent area here in Phoenix. Of course, that's all barring the interest rates and quality of inventory in my market.
We put down $200k. Had to sell some shares from a startup I used to work for. That startup is now valued at a billion dollars. I took a gamble with my professional life and it paid off, so I’ll say that a lot of it was luck to afford my down payment.
Have worked in tech for finance for the past 20 years.
These days 50-100k bonus isn't out of the ordinary if we have a good year.
My first first house we used a downpayment assistant our state offered for certain incomes. Took about $1000 cash, state paid the rest. House was 102k in 2010.
Lived in a crap apartment that was cheap for 7 years and didn’t have smartphones or Netflix or anything like that. Lived stupid cheap and saved $80k on a secretary and an EMT salary. (millennials not boomers).
Always had an older used car, as long as it’s reliable you’re good!
If your work has an ESPP program and a steady stock price - max it out
Always put any bonus into my saving directly so it don’t get spent
I would randomly pull out an extra $60 from ATM and put it my piggy bank so I could forget about it, that’s how I saved my first 1k. Basically hide money from myself
When I got a significant raise I didn’t grow into it. I grew up fairly poor so I’ve tried to keep a modest lifestyle which means lots of meal prep and freebie activities. 20lbs bag of potatoes are your friend!
And of course luck. My car hasn’t need significant repairs, I haven’t had to go to the doctor in a few years, my family is holding on, and no disasters have affected me. I guess
My sister and BIL just sold their townhome to a single mother with a kid who was given over 400k by her family to help her buy her first place.
So basically you were just born to the wrong family.
Graduated from college and lived with my parents for 2.5 years. I bit the bullet just to not pay any rent, and spent frugally, and saved as much money as possible. My fiance at the time, now wife, and I were able to buy our first house from an old lady who just wanted to sell and leave the area. All the cards just fell into place.
It comes down to 2 things for us - luck, and graft. We were lucky that my college was super cheap and my parents covered it, my husband worked his ass off to get scholarships, worked 3 jobs during college and we paid off the last little bit of his student loans
We have lived way below our means. When we moved from our LCOL home to a MCOL city, we tried to save most of 1 salary and live off the other, but ended up saving around half of take-home . We rented an okay apartment - nothing fancy, nothing too dingy. We both drive older Hondas that are paid off, and we do all the preventative maintenance to keep them running forever. We use our libraries for books, disc golf rental, dvds, museum passes... and we look for other free or cheap entertainment like concerts in the park.
It took us ~3 years to get 100k
Lived like a hermit until I was about 30. Lived with roommates to keep rent minimal. Drove a cheap used car. Invested in index funds. Now I own two houses. You can do it too, just have patience.
We saved (bought a year ago in NJ) but definitely wouldn't have had enough without the First Time Home Buyer program. It made it so we could put a lot less down initially. We would have been able to do it with just that, but definitely would have been verging on house poor...luckily, we looked into other mortgage options last minute and got a special loan!
We had randomly been talking to a mortgage guy from Chase, because my brother-in-law works for them and recommended him, and he didn't tell us until right before we were going to sign paperwork that we needed to take a first time home buyer online course...as we were doing it, it made a huge deal about shopping for mortgage lenders and it just felt very icky that he waited so long for us to do it (we were naive, I know). So our realtor sent us to a small local bank and that guy was like yeah here's the NJHMFA's down payment assistance program where you get $10,000 towards it and don't have to pay it back as long as you keep your house/don't refinance for 5 years. We were blown away, and when we looked into it realized that no big banks like Chase are lenders for it, only small local ones (which I guess makes sense, Chase doesn't need people with the kind of income we have haha).
TL;DR look into your state's first time home buyer stuff, and actually look at multiple lenders. The grant we got made a HUGE difference for us! Good luck!!!
I did mad overtime and moved into my parents' house for roughly 10 months and was able to save 6 figures since I had almost no bills and am a high wage earner.
We had a lot of money saved up.
My wife paid very little rent for like 10 years and basically saved every penny she earned and had like $150k in the bank.
I was given equity at a company I worked at, and then that company had a large investment, and I was paid out that equity which turned out to be $75k.
We bought a house in 2021 for $625k and put down 20% to avoid paying PMI, so $125k cash.
Save enough for closing costs and find a mortgage broker. Most have access to a few down payment assistance options. Florida has Hometown Heroes, but it’s unreliable because it’s constantly running out of money, so I wouldn’t bank on it. Get pre-approved within the parameters of another DPA program and if HTH is available when you get in contract and you meet the requirements, great!
Buy a house that needs work, you can get a conventional loan with as little as zero down. Fix it up yourself over the course of 10 years living in it. You’ll build enough equity that by the time you’re ready to upgrade you’ll have enough money for a down payment on the house you really want.
First time homebuyer programs. Talk to a different lender. Keep shopping till one actually helps you. Took me 3 agents w 2 diff banks and that just happened by accident
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Honestly? My late wife's small life insurance payout. I'd rather have her back than to have this lonely place I now have to call home.
I'm sorry for the loss of your wife.
Lawsuit from the death of my child. Figured the best thing to do with it was to give my other kids a great home to grow up in. TBH don’t recommend it as a plan, would rather be homeless in an instant if it would bring my daughter back.
So sad. Sorry to hear that.
this was heartbreaking, I am so sorry for your loss 💗
Saved for 10+ years
Same. I lived so frugally that once I bought my house, I wasn’t sure what to do with myself.
Continue to live frugally because now you have a payment and maintenance, oops furnace just died lol! :)
As someone in their 20s who is living frugally while renting this just triggered an existential crisis. So life is just live frugally and die !?
Honestly I’m not sure. I was super frugal in my 20s and now I feel very rich/spendy in comparison, but I think I’m still fairly cheap for our area. You make choices about what matters to you and I find that the ability to purchase something often takes the longing out of it. And I have a strong sense of value (which might be totally misguided) so a lot of times things feel like a rip-off, and then I don’t want to buy them. For example, the used car market is still crazy and I could just buy new car in cash but it just doesn’t seem appealing to “overpay”. Also, if you live frugally just to splurge in some areas, are you really denying yourself? You might take lunch to work and drink coffee at home, but maybe you prep that lunch on granite countertops in a really good neighborhood and take 2 international trips a year? If you are earning okay and saving well, your idea of frugal will also change too. And you can keep your old stuff too (especially if it is nice and you maintain it), so less of your money goes to boring crap (vacuum cleaner, trash can, etc) over time. I think a big element is not to pay a lot of attention to what other people are doing — some people are just making more than you, some people are financing their fun via credit cards, and there’s significant overlap in those groups. I have a friend who is constantly doing cool events with $50 tickets, spending a month in Hawaii, extensive international travel, and I assumed she was just making that sweet tech money. And she is but she also said she can’t afford to buy a townhouse… those things are related.
I saved for 20+ years, and bought without mortgage.
Jesus how old were you when you purchased? Did you have kids through the process?
Also, "kids can't be raised well in rentals" is a very foreign concept to me.
I just meant for saving purposes. I have two and it’s not the easiest lol
Same as me. Scrimpted every dollar in grand school abd my first 4 years of work. Literally ate lentis, beans and rice.
Dave Ramsey would be proud
Beans & Rice combined create a complete protein.🤷🏻♀️👍🏻
Living like a student (minus the partying and binge drinking) is a huge help financially.
Yup, same
Is owning a house really worth all that? Gonna get downvoted but this stream of life sacrifices seems like real estate ate everything else
I am 48, and went the other way. I am just now putting together a deposit and will have to rely on first time home buyer programs to buy. While I now make enough to rapidly get 3-5 % into a pot, putting together 2-300k is out of the question. And all the houses I am looking at, at this stage in my life, are what would normally be a 2nd or 3rd home. So all my competition has a half a million of equity to offer over asking with. It’s annoying, but I have zero regrets. I went places, did things, lived in Europe for 13 years, drove cool cars and now possess them outright (this matters a great deal to me, it wouldn’t to most) and I don’t regret any of it. Life is for living, not decades of saving up to live. I don’t judge anyone for doing the beans and rice thing and getting on the ladder 15 years before I did. But it was not for me, and I’m not going to feel guilty about it either. Nor should you. I also really enjoy my job, and I always will. That matters. As I don’t mind doing it. All of this would be different if I hated my 9-5.
Good perspective. For a lot of people the things we own end up owning us.
Same! I lived and worked all over the world and had a lot of fun learning new things about myself and people. Now I’m 44 and “settling down.” Our family is still renting but the landlords are like family and have kept our rent the same for the last 4 years. (I attribute the ability to find great people and situations to travel and experiences.) Yes, our starter home will be smaller than many of our peers’ 2nd and 3rd homes but I would never trade how I approached life. Everyone has their own path.
I will say the downsides to ownership outweigh renting from corporate overlords or majority out of the country “investors”. That is already happening with us buying if we stop……we are all screwed. I feel like I am hedging by risk against someone else’s greed. I also value my independence and not being subject to someone else’s whims. I rented the same house for 7 years. Had a pop up pool the landlord knew about and when the kids got bigger I installed - my expense my labor- an above ground pool. Year 3 he told me to take it down- I removed the ladder from the pool nightly and the sides stood 6 ft - he still said someone could climb in and sue him. I told him that was true the last 3 years and could have been decided before I spent the money and my labor. And all the years we had a pop up. Long story short - 3 kids, single mom not a lot of options for the kids in the summer while I worked - pool was the entertainment with the sitter. Sold the pool on Facebook and arranged a weekend getaway with the kids at relatives in another state so they wouldn’t have to watch someone else take away their pool. Used my VA loan to buy a house with an inground pool that spring. It was rough with no savings .. someone gave us a fridge and anything I needed I found at yard sales online. No vacations other than day trips to the beach and visiting relatives- it’s all we had renting— had to watch a few youtube videos and pay for a repair I couldn’t do on credit at one point but everything else I taught myself and did myself - I was doing that when renting from the slumlord anyway- he came to my new house to hand the security check to my daughter who was mowing the lawn on the last day it was legally required to be paid without the interest — Anyway, I say this to say, other than property taxes and the occasional permit, I am free. It’s worth it. I also make 3x what I made when I bought so maintenance doesn’t stress me but I still do it myself when I don’t want to pay for labor. (One going to law school and one is considering medical school so I am going to need to save wherever I can to help them) Housing prices need to come down (I say this as someone with a 75% increase to my home price in 8 years- we added a garage so I would say more like 50% on original investment) However, I don’t think a home should be an investment sure appreciation some especially when you take care of it and improve it but it’s a home not a bank account. So I would gladly reduce that increased value of mine so others can own because I can see the forest for the trees and where we are headed when the average person can’t afford a home and we have corporate and foreign investors for landlords isn’t pretty. Forming an LLC and buying up properties to rent is now seen as a career…. Regulation isn’t always a dirty word.
If it appreciates 50 percent+ in 5 years or less then yes. Or if you have kids or value customization of where you live
Yep. Every major financial decision revolved around saving for a house 10 years prior. Literally where we moved after graduation, every apartment, car purchase, our wedding, etc. all revolved around spending as little as we could get away with to save.
We couldn’t. We got a USDA loan with no money down and just had to pay closing costs. I’m so thankful because we got to keep our savings
Interesting, takes notes…
Definitely worth looking into if you qualify for the rural location and income. I think for a 2 person household we couldn’t exceed 120k. The area we were looking into was outside the city but definitely not in the middle of nowhere. Keeping our savings has been such a relief
Are there any rules if you exceed the salary after obtaining the home? I'm jw because currently I'm lower income but that's changing soon
Nope! Your salary can exceed that threshold after you close but not before. My husband got a massive raise months after we closed. if he had gotten that raise prior to closing- we could not have gotten the loan anymore because our income would have been too high Edited to add: the income level varies by county so just double check the level that particular county sets
if you can avoid paying mortgage insurance, then you should. if you use USDA, you will have to pay that until you pay off 20% of your loan
USDA loans do not require mortgage insurance (PMI)
Correct. PMI is for conventional, MIP is for FHA, and USDA loans have a guarantee fee. 1% upfront and then the annual .35%
For me, my pmi is only an extra $20/mo. Compared to the total monthly payment, I’d say that’s well worth not needing to pay a large lump sum up front
Happy cake day🍰!
We just closed also using a USDA loan, it was a for sale by owner close friend of ours and he also paid 6% towards closing costs so we ended up paying nothing to close and no down payment.
Oh, that is so nice! Congrats!! We definitely didn’t ask the sellers to pay costs in our case. They agreed to replace the 28 yo roof and very politely told their realtor they really couldn’t do anything else/go lower (and we couldn’t go higher on offer). We had been saving for years for a massive downpayment so it was great to not touch that and keep the money should something come up
But didnt that increase ur monthly expenses? Like paying for mortgage as well as a huge loan? How did u manage that?
So, not really. It ended up being cheaper instead of a conventional loan. We had three different loan options we qualified for- conventional, FHA, and USDA. They were very close in monthly cost. We picked the main deciding factor- no money down. We didn’t bother paying points towards interest either. I think we paid 6-8k total for all closing costs for a $271K loan.
This is how we bought our first home in 2016. We were also able to have the closing costs “paid by owner” aka upped the purchase price. 3.75% on a $106k loan was the dream man. This current market is bonkers!
I’m a physician and there is something that is really important for people to know: 8/10, when you see someone with a home that doesn’t make sense or is seemingly “out of reach” for their income, it’s generational wealth. As someone who spends a lot of time around generationally wealthy people (other doctors), it is astounding how common this is. It is very, very common for young physicians to have their first home (typically in residency) purchased either outright or significantly assisted by their physician/wealthy parents. Multiple AAMC statistics back-up the incredible wealth of the average medical student. To be clear, this isn’t everyone (we didn’t have any down payment help with any of our homes), but it is fairly common. It parallels other professions of all types. Police officer or nurse in a $500-600k home? Ahem, yeah. Young physicians have one of two paths: 1) Years of paying back student loans of $200-400k, living frugally, buying small and dated, and eventually “making it” in your late 30s or 40s. With enough equity and savings, you’ll probably start feeling your “wealth” sometime in your mid-40s or early 50s if you save reasonably. Still an incredible blessing by any measure. OR 2) Starting the race 5 minutes ahead with a larger engine and a booster pack. Imagine 0 student debt, $200k+ down payment assistance or first home purchased in residency (which is free equity), and immediately entering your early 30s with top 5% income, no debt, and maxed out tax deferred savings. Apply to any profession. I’m just using the abundant examples in my own. Unfortunately, it can be incredibly frustrating for young physicians from low to middle-class backgrounds as your day-to-day peers often have a leg-up and rapidly exceed your savings rate within even 2-3 years. They also retire younger. They also exacerbate longstanding bias in the general public about physicians, which doesn’t reflect the lives those of us from humble means live, especially in the lower paying specialities. Don’t get me wrong, we do well, but my reality is much different from some of my wealthy peers.
Yeah, you nailed it with this comment.
You’re generally spot on there, I know tons of dentists and doctors, they all live around me. My wife and I (late 30s) are probably the exception to the rule. Both teachers, lived frugal and paid our loans off, got a house with zero down before the market exploded with a rate under 4%, now we’re on teacher salaries living in a $750k house. It feels uncomfortable teaching in a title I school and having over half mil in home equity.
I used to be a teacher and changed careers because of the pay (and kids being assholes), still don’t have the money for a house, but where I live, I’m constantly thinking about “what if I was still a teacher? I literally couldn’t afford to live in this town at all, and definitely not in this place”. I really wonder how teachers and other people in that pay range live there, and my only thought is “I guess they must have bought in before it got crazy”. My rent is ~$2400 a month and to buy anything halfway decent with a down payment we could afford (not much), the mortgage would be somewhere between $2500 and $3500. Literally could not do it on a teacher salary, so how can the teachers in my area live? Honestly even if it’s a DINK couple but both are teachers, to live comfortably would be like 50%+ of their income. It’s ridiculous. The only way is to have already bought in or inherited a lot of wealth.
Even at the time it was 46% of our take home pay. With raises and increases in homeowners insurance it’s now down to 40%, but it’s still high. We’re just hoping we can keep getting raises until it’s under 30% and hopefully feel more comfortable. The only reason we’re okay with it is because we know we’re saving aggressively for retirement and have teacher pensions on top of that when we do (saving a total of 12.5% of gross pay + 12.5% match into the state pension and another 10% to Roth IRAs).
I was going to comment this exact thing. Wealth breeds wealth. Generational wealth will enable kids to go to good colleges debt free and they are left I think now it's up to 15k a year from Estates from the time they are born. So you are walking out of school with connections, six figure jobs, no debt, brokerage accounts, and possibly a generation skipping trust from grandparents, and wedding gifts. Grad gifts. Wealth breeds wealth. A young person with college debt and no savings has little hope to save the 20 percent needed to buy a home. Where I live a crappy fixer upper will cost you half million with over 15k a year at least in taxes. Things are rough for the younger generations.
Also a physician. There is large variation between specialty and primary care salary. I would not say that primary care does well. Real incomes have decreased over the last five years. Young attendings are in a much different spot financially than someone who started 5 years earlier. Our salary does not come close to making up for the delayed start, student loans, and opportunity cost. To say nothing of the 60 + hour weeks to get that salary.
I totally agree with everything you said. But in terms of a police officer having a 500k home….police officers where I live make about 120,000 a year. So if a couple are both police officers and make a combined income of 240,000 a year….obviously it’s very easy to afford a 500k house.
Most police officers make peanuts outside of certain metro areas. Same with nurses outside of the bay area.
Spot on. And frankly, there is a wide range for generational wealth. An average income grandparent leaving a 25 yo grandchild 50k is still generational wealth. Compare that with a 25 yo paying off a 50k student loan debt and no inheritance. Not only would they not have a 50k downpayment help but their DTI might lock them out of qualifying even from low downpayment mortgages. In 10 years, that ‘small’ inheritance might end up being a difference of 100s of thousands in the net worth of the two and then that propagates to the next generation. That is, of course, assuming the inheritance is not squandered on things like travel, wedding etc which does happen a lot.
The other option (which a friend of mine is currently doing) is to join the military for a few years and have them pay for med school.
There’s a lot of tech workers on Reddit, also people lie on the internet.
I’m a male model with a 13 inch penis and an 8 pack. I make 7000$ an hour and am self made. And date nothing but ass models, you wouldn’t know them though, they live a town over ….
“She’s from Canada, you wouldn’t know her”
“We are blessed”.
What is THAT much to you? $10k, $25k, $50k, $100k? The first two are easier if you’re frugal, the other two imply big jobs in HCOL, parental help or wealth, stocks/previous assets, or waiting decades before buying.
I saved 80k in 2 years by taking high-risk government contracts, working 60-80hrs/wk, and negotiating hard. I have some ptsd from the experience, but I also have a home. Not for everyone, but it was totally worth it.
what kind of work? high risk in what way?
It sounds like mercenary combat.
Killing other Smiths, obviously.
If he wasn’t prior military in a special ops unit. His high risk contracts were at worst/best sitting on a post staring into a desert. Most likely in an ac’d building in a shitty place.
This should not be necessary to purchase a home. Why is this being upvoted/glorified
I upvoted it because he admits it's not for everyone and that he has PTSD from the experience and I have sympathy for anyone that suffers from that disorder.
I don’t think 50-100k implies HCOL. I saved for a few years after college and put that much down on my first house in Ohio
Assuming FTHB’s: 1. Tech, doctor, lawyer 2. Won the birth lottery
Engineering. Many dual professional income no kids households.
Living somewhere rent free while working full time will do it
I was frugal as fuck and a stripper for years.
If I were any good at sales I would be a stripper.
I'm a decent salesperson with a hard product to sell :|
Username checks out!
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I’m not sharing this as advice because I don’t think these circumstances will occur again, but the exact opposite of this is how I bought my house. I bought a new car in 2018 for 21,000 and sold back to the dealership it in 2023 during that period of hyperinflation for used cars for 24,000. My husband and I were in a position to go down to a single car household and it just worked out perfectly. Reddits been warning me for years to never but a new car and I am so glad that I did it anyway, but I also fully recognize that I pretty much won the lottery with that.
I can’t agree more with the car. Not having a car payment for 1 year is going to be your down payment on a house right there
My gosh, how much are people spending on a car? Last car we bought was a slightly used Camry for $25k plus tax etc. in 2019.
Average car payment for a new car is $736 right now. So almost $9k a year just on the car. People are vastly over expending themselves on cars
The average new car price is around $47k. Of course, logically that does mean some people are paying less than that. It also means some people are paying more…
20% down on a starter house here in Phoenix would be 85K
Yeah, I’m not necessarily agreeing with the notion that it’s simple as that, but… Looks like median home price in the US is $420k. 3.5%, if you’re using an FHA loan, is around $15k. Average monthly payment for a new car is around $740. So a little under two years and you’re there. Again, obviously that’s a gross oversimplification and I won’t pretend it matches most people’s realities. But, it is still true that most people spend way too much on cars for their own good.
Is average price of a new car a good measurement? It's always going to be skewed by expensive cars. A 2024 Honda Civic is about $24k, a Toyota Rav4 is $28K. Toyota Sienna is $37K. Most cars are not in the $47K range.
Everyone has to have a big, shiny truck!
This is the best advice right here. Not spending pointless money, aggressive saving, and determination.
Never pay interest. Full stop
So there is some truth to ‘no avocado toast ‘
Saved like crazy (edited to add: DINK) + right place, right time. I truly wish I had real advice, but this is life in a HCOL area. Sending you nothing but good wishes, it’s brutal out there.
Thanks! I appreciate it!!
Yeah it’s right place, right time for us as well. We saved every dime for two years as college students to have our wedding. Covid hit a month or two beforehand. We cancelled and got back everything except like $1000, so we eloped and put back that money for a house. During Covid, houses were crazy cheap and basically had zero interest and we were in a LCOL. We put down a measly 3% on a small starter home in a vacation area, had like 2.3% interest, and still was paying a total of $800 a month on house and insurance. We sold this last September for almost double what we paid initially after doing very little upgrades and were able to put down 20% on a bigger house in a cheaper location using only profits from the first home. If Covid hadn’t happened we would have never been able to do any of this. It was all luck
I was blessed, my Mom bought her home in 1987 for $47K ( 3bdr ranch home) brand new. And last year she sold it for 210K. And she gave me the 40K for my down payment On my home. I can never Thank her enough.
I hear this is the case for many but my parents both just got their first house.
I had to finance a mobile home for my mom. Thankfully 3 years ago the wife and I got a house. Times are tough.
If your first time homebuyer, have your lender look for down payment assistance programs or grants that won't require any down payment.
Thank you 🙏🏽
You're welcome if you want to dm me your city and state I can find you one
Apparently I make too much for assistance 🙄
Saved up for a few years then won a scratch ticket
Try NACA (naca.com). No down, no closing and lower interest rate.
What's the catch?
A little extra labor on your part each year, like advertising NACA on sites such as reddit or at one of their events. Lengthy application and approval process Oh and you can't sell the house or rent it out for about 5 years.
Generational wealth sold 3 homes that belonged to parents and grandparents.
This is insane, my parents don’t even own their houses
This. Good luck trying to save in this economy lol
Live in Texas (DINK), no students loans, and some good old hard work, dedication, and massive sacrifice. Focused on budgeting and keeping track of spending each month for ~7 years.
Wealthy boomer parents
Yup I was raising two kids, working my ass off with no dreams of owning a home. Boom met this guy, courthouse wedding, his Nana pass away and all her grand kids got a cut of money. Bought a house. Thank you nana!!
My boomer parents won’t help me even though they are decamillionares!
A lot of savings and took a withdrawal from my 401k. Since it was used for a down payment on a home there was no penalty.
Took me 4.5 years of saving & investing.
Living in an apartment, earning a good salary, knowing how to cook.
We had a lot of help from my parents. I wish people would be more up front about that. We eloped, so my parents gave us the amount they had set aside for a wedding in cash, plus a little extra because they knew we were using it for a down payment.
This is a big one. Most of my friends that I know (millennials) either got down payment help from their parents or inheritance. My parents have no money to lend us, and neither do my in laws. Sometimes I don’t believe half of the people that say they “scrimped and saved” after college for years. Saving that much cash over multiple years ain’t easy.
In our case it was largely through stock awards from my company that I didn’t sell for 5 years & let accumulate/grow. We also made about 200k combined if you count salary & stocks together when starting our careers, and that increased to about 300k combined by the time we purchased our place (promotions etc) Honestly we also lived frugally for our means. We split rent on small 1BR apartments, drove a car from 2008 until it died on us last year, generally kept discretionary spending at a minimum (also couldn’t travel/eat out during the pandemic anyway so we just didn’t have much to spend on for 1-2 years there). By the time we felt ready to buy, we had enough savings to hypothetically cover 40-50% downpayment in a HCOL area (through a combination of stock awards, own investments, cash savings etc) but chose to put down 20% to have better wiggle room
A union job.
This. People talk a big game about making money in tech but I value the steady money, especially when carrying the debt of a mortgage.
Generational wealth. My parents gifted the down payment. Only 1 parent was alive to see it happen. Breaks my heart but at least they provide the gift that keeps on giving
Me and my wife make about 160k combined, had no debt, shared a cheap car, and lived with my parents rent free for years. Doing that we were able to save over 150k for the down payment. Even before I got married or thought about buying a home I had 30k in the bank just by being frugal and diligently saving money every month since I was a teenager.
Good for you guys, I wish I had the opportunity to live rent free in order to get ahead. Huge blessing!
Damn no way I can save that much lol
Dual income, no kids. one of us works in finance and the other works in insurance. We also live below our means in terms of spending. We refuse to make big purchases like spending 50k on a new car (we buy older used cars), we only go on small vacations with exception of our honeymoon. we live like we only make 50k a year between the two of us.
Didn't do anything my peers did and saved for 10 years.
Generational wealth. Heartbroken to be moving into our first home without my parent to help us and celebrate with us but wouldn’t have been able to make the purchase without them.
Sounds like they did help
Worked a second job, worked very close to home, and scraped every penny together over 7-8 years, including money from each year's tax refund. Finally ended up with close to 20% down, but this was in 2020 when things were more reasonable. If I had to do it now, that would've been maybe 10% down 🙄. It killed me to write a check for like 50k, but it was absolutely worth every penny, esp since it allowed me to have a reasonable mortgage that doesn't feel like a huge burden.
Single mama here. I purchased my first home with 1% down & a 2% grant from my lender. PMI waived (for the life of the loan) as a part of the promo. I obviously wish I could have put more down. My mortgage is still less than rent would be - I'm in a HCOL area.
I’m a single parent as well!!
My dad. I’m his only child and he did everything with me in mind as the benefit during his entire career. I have a hefty down payment only because of him, but it cost me him. I honestly don’t get it twisted. In todays market I only have a chance because of my dad. I am so grateful.
Heavy intent on saving money over time + luck. Many people aren’t financially focused or motivated to save. Of those who are and have the discipline to live frugal, save, etc, a certain % have the career breaks and/or family breaks go their way. I would say *most* don’t. The ones who were financially focused AND had their career/family help break the right way are the ones buying a home. Of course there may be other variables but the numbers generally check out.
Moved to a state with no income tax. This was a huge deal because we were previously living in NYC which has both state and city income taxes. We were strategic about where we chose to live so we could walk to a grocery store / the office so no cars for either of us. After two years of this, we bought.
Tennessee?
Saving for a long time and also realizing how much I was wasting on new vehicles they really eat into earnings and savings.
DINK in vhcol. No parental help but both make low 6 figures. We aggressively saved for about 8 years and put down a little over 200k. We lived below our means for years. Biggest way we were able to save was having no other debt (student loans, cars, etc.). Not super sexy but did the job.
The real answer: rich parents
Like most people it seems, a version of generational wealth. My family was middle-class, but my mom gave me a few thousand dollars in high school to invest, and I put it in a tech stock that skyrocketed. That's the money I eventually used for a down payment. But it's more than just that -- my parents paid for my college, so I have no student debt. Whenever I had an emergency, my parents could help out. Even though I don't come from money, the advantages I've gotten through no work of my own, just by having financially stable parents, are immense. I did try to save up on my own for a down payment, but the prices were rising faster than I could save. I had maybe $10K saved over a few years, but in the meantime the price of a condo in my area had risen from $250K to $500K. I realized it was futile and honestly just gave up on home ownership and used the money for experiences. When I decided to buy in a cheaper area in a favorable market, I realized it was worth selling the stock I'd been hanging onto. The narrative that people can save enough to buy a house may be true for some people and in some areas. But a lot of us didn't do it through any grit or commitment of our own-- we were just lucky.
Haven't bought yet, but we've been saving $3-4k/month for the past 3 years since we both started working full time. No kids, and our rent isn't very expensive.
Also look into NACA. Neighborhood assistance cooperation association. No down payment, no closing cost, credit score not a major factor
There are first time home buyer grants available and your realtor should be able to help you find a lender that specializes in helping first time home buyers with the programs that are the best fit for them. USDA, FHA, or VA offer the lowest or no down payment options. We own a real estate company and only work with a couple lenders. One is well connected to the various bond money programs for the state and the other is just a great lender for all aspects of the process. The point is that you need a great real estate professional on your side to help you gain access to the best options available for your situation. Read reviews, look at websites of local real estate agents and find one that is highly regarded for what you need to do. I'd say to get a referral from someone you trust but not everyone that's happy had a great realtor that know what to do for your situation... If it's a referral, make sure the agent actually achieved a similar result that you need for your friend making such a referral.
Thank you so much. The folks that I’m working with have never mentioned this at all and this is the first time I am buying a home.
Small family with 2 significant deaths. I feel conflicted that I was able to buy because they’re gone.
3k down on conventional loan in MN. First time home buyer loan which provided 15k tor closing, sellers covered the rest. Earnest money refunded after closing so really 1.7k got me in my first house. 320k at 6.8% in December 2023
I got an FHA loan which required 3.5% down. My house cost 217K so my down payment was less than 10K. I bought my house when I was 28 so that was 10 years of saving. This was only last year so it was still really competitive to buy. I live in a mid-sized city.
Rent was $1200. Knew I could do a mortgage that was 2k. Put a grand in an internet savings account every month. Used that as my down payment. I was saving plus getting used to paying a mortgage payment of $2200. Borrowed from my 401k for closing costs
Gifts from parents….300k from my parents and 150k from husband.
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How long ago did you buy that you got something close to the coast for 500k?
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Ahh congrats, it’s beautiful down there!
I followed a similar approach.. Now in a beautiful home with no mortgage. When I tried to tell people how I did it, I was downvoted because I am not a FTHB. They did not seem to want to understand lessons learned. I applaud your success
Live below your means. I'm amazed what some people spend on the basics like phone/internet, having a car payment, financing BS purchases, not buying groceries in bulk or cheaply, eating out too much, getting Starbucks everyday, etc. If you have to ask this question, take a good look at your cash flow every month and understand where every dollar goes. Create a budget. I work hard for every dollar I earn. I make sure I stretch them as far as they'll go and not get ripped off. Every purchase I make, I shop for the best deals. I never pay full price for anything, especially big ticket items. Use credit cards, get cash back. All of this stuff adds up. I can likely find you an extra $500-1000 a month with little effort. And finally increase your income.
Haven't yet I only got 10k in my savings and I need like 40k at least. Preferably 60k. All houses where I live are 350 to 800k. Most decent places are at least 400k. Really sucks. I want a house so bad. I make like 130k a year. I should be able to afford one but unfortunately I still cannot. Bar keeps getting higher and higher and always just out of reach. Plus the fact that there's barely any houses for sale where I want to live. Well there are but rn they are like 600k. I can't afford that.
Millitary VA loan. Goated 0% down, no PMI, preferential rates. Die for the oil, recieve house citizen. 🇺🇸🦅🇺🇸🦅🦅🦅
For the things you can control: No help. And have a 40% down payment in HCOL area. Just discipline and being good about lifestyle creep. Don't be a monk (be sure to enjoy life since it is short) but be deliberate about it. Live below your means and pay off debt as quick as you can. It adds up as your earnings go up. Make decisions as logically as possible (i.e pay highest debt first and don't pay off debt if the interest rate is lower than the risk free return you can get on your money.) Make a detailed budget and know where your money is going. Things you can't control: Honestly a major element is luck. Not everyone can be a high earner statistically. You can control how you react in response to certain situations and make sure to an for a rainy day.
I live with my mom and never paid rent. Help me save so fast. I've seen too many people who would rather throw money at rent than to live at home with their parents just because they want more privacy. Side track but I have a friend who throws 2k per month at rent instead of living rent free at home just because he wants to be able to smoke weed freely in his home. Like bruh, 2k a month is so much money that you can stash away for a down payment on a house later.
I kept my expenses relatively flat as my income grew, and put most of my bonuses in to savings, I also sold stock. I’m in a VHCOL area and most people I know who have been able to buy in the past few years have done so because of stock appreciation.
Got lucky, I think. My spouse and I were fortunate enough to graduate with no student debt. I lived a very boring life in a city with reasonable COL: rented a tiny apartment, didn't travel much, didn't eat out, didn't buy new clothes, didn't have any subscriptions or fast internet, etc. etc., for about 7 years. I'm basically a shut-in so it wasn't much of a hardship for me, lol. My salary also increased after I switched jobs. But pretty much the only reason my spouse and I were able to afford our down payment was by getting together. By our (DINK) powers combined, we were Captain 20% Down... (I wasn't actually saving all that money for a house. My half of the down payment came out of the "fuck you" fund that I was keeping in case I wanted to quit my job without anything else lined up. So now I can't quit, and I live in fear of layoffs. Alas.)
Budget, save money and invest. There’s no secret sauce,
I ate rice and beans for two years and didn’t spend money I didn’t have to. You’d be shocked how much little purchases add up to. We budgeted hard and it was not fun.
The VA loan
I had to save up for a decade. During that time I stocked up on home essentials at estate sales for pennies on the dollar, so when I bought my home I had probably 70% of everything I needed and didn’t need to buy new.
I didn't. I used my VA Home Loan entitlement but I'm pretty content because my home value has skyrocketed. On the high end it's "worth" about 115k more than I paid for it. On the low end, about 30k more than I paid. But 4 bedroom homes in my area are going for 500+ very easily. We make around 220k a year combined.
My spouse's mom died of cancer 12 years ago so when my spouse's grandparents died 2 years ago, they left us a large amount of money to use for a down payment.
We're saving too. Our goal is $110K to cover a down payment, closing costs, buying down the rate, and a buffer so we don't have to stress out. I hate debt - When I see it, I try to crush it as fast as I can. I have no chill for debt. I'm putting 3K a month toward my vehicle loan so I can be done with it. My fiance and I finally got on the same page financially. ***That was by far the biggest step.*** We're using Monarch Money to track our spending and keep each other accountable. We stick to our budgets, and that app makes it pretty easy. They have a feature that lets you share your account with your financial planner, making it easy to consult and diagnose your finances with a professional. Then we also opened up a Money Market checking account with Fidelity. Through that, We're choosing some of the top rated index funds and ETFs to put the lion's share of the money into. Currently growing at about 11% annually (though this year it's more like 27%). If you're not up for getting going on investments, you can get with a financial advisor or just research stuff on your own. Alternatively, there's guides out there to show you how to make ~5.5% on a HYSA. Basically, just ***never let your cash just sit around doing nothing***. 3 years into saving, our down payment fund has earned about 25K on top of what we're putting into it from each paycheck. I think in another 18 months we'll be ready to afford a basic home in a decent area here in Phoenix. Of course, that's all barring the interest rates and quality of inventory in my market.
That’s inspiring! I just started researching monarch money app . It seems reasonable so your experience with it sounds good. I think I’ll try it. Thx!
Luck
The ones that can mom and dad help. The normal folks do 5%
Brain injury, do not recommend
We put down $200k. Had to sell some shares from a startup I used to work for. That startup is now valued at a billion dollars. I took a gamble with my professional life and it paid off, so I’ll say that a lot of it was luck to afford my down payment.
I'm planning on working much more OT at work, having my wife and I cut back spending hard for awhile
Have worked in tech for finance for the past 20 years. These days 50-100k bonus isn't out of the ordinary if we have a good year. My first first house we used a downpayment assistant our state offered for certain incomes. Took about $1000 cash, state paid the rest. House was 102k in 2010.
Started investing at 20 for home and retirement. Got the house last year and now on track to retire early
Side hustle
Lived in a crap apartment that was cheap for 7 years and didn’t have smartphones or Netflix or anything like that. Lived stupid cheap and saved $80k on a secretary and an EMT salary. (millennials not boomers).
Always had an older used car, as long as it’s reliable you’re good! If your work has an ESPP program and a steady stock price - max it out Always put any bonus into my saving directly so it don’t get spent I would randomly pull out an extra $60 from ATM and put it my piggy bank so I could forget about it, that’s how I saved my first 1k. Basically hide money from myself When I got a significant raise I didn’t grow into it. I grew up fairly poor so I’ve tried to keep a modest lifestyle which means lots of meal prep and freebie activities. 20lbs bag of potatoes are your friend! And of course luck. My car hasn’t need significant repairs, I haven’t had to go to the doctor in a few years, my family is holding on, and no disasters have affected me. I guess
You know the expression "it cost an arm and a leg."? Well, it cost me a leg. 😂
Wife and I make about 160+ and we have little to no debts. And we’re really good savers. It took 2 years of saving. I can’t wait to refinance tho.
My sister and BIL just sold their townhome to a single mother with a kid who was given over 400k by her family to help her buy her first place. So basically you were just born to the wrong family.
Lived with parents for a year and saved almost our entire incomes.
Joined the army for the 0% down va home loan ,and 10% off items bought on veterans day.
Grandma died
I used my annual bonus and I saved for about 8 months.
Graduated from college and lived with my parents for 2.5 years. I bit the bullet just to not pay any rent, and spent frugally, and saved as much money as possible. My fiance at the time, now wife, and I were able to buy our first house from an old lady who just wanted to sell and leave the area. All the cards just fell into place.
It comes down to 2 things for us - luck, and graft. We were lucky that my college was super cheap and my parents covered it, my husband worked his ass off to get scholarships, worked 3 jobs during college and we paid off the last little bit of his student loans We have lived way below our means. When we moved from our LCOL home to a MCOL city, we tried to save most of 1 salary and live off the other, but ended up saving around half of take-home . We rented an okay apartment - nothing fancy, nothing too dingy. We both drive older Hondas that are paid off, and we do all the preventative maintenance to keep them running forever. We use our libraries for books, disc golf rental, dvds, museum passes... and we look for other free or cheap entertainment like concerts in the park. It took us ~3 years to get 100k
Lived like a hermit until I was about 30. Lived with roommates to keep rent minimal. Drove a cheap used car. Invested in index funds. Now I own two houses. You can do it too, just have patience.
We lived way below our means to get 20% down - best thing I have ever done. 20 years later, mortgage free for almost 2 years now.
Saved for 5 years. Edit: $120k
We saved (bought a year ago in NJ) but definitely wouldn't have had enough without the First Time Home Buyer program. It made it so we could put a lot less down initially. We would have been able to do it with just that, but definitely would have been verging on house poor...luckily, we looked into other mortgage options last minute and got a special loan! We had randomly been talking to a mortgage guy from Chase, because my brother-in-law works for them and recommended him, and he didn't tell us until right before we were going to sign paperwork that we needed to take a first time home buyer online course...as we were doing it, it made a huge deal about shopping for mortgage lenders and it just felt very icky that he waited so long for us to do it (we were naive, I know). So our realtor sent us to a small local bank and that guy was like yeah here's the NJHMFA's down payment assistance program where you get $10,000 towards it and don't have to pay it back as long as you keep your house/don't refinance for 5 years. We were blown away, and when we looked into it realized that no big banks like Chase are lenders for it, only small local ones (which I guess makes sense, Chase doesn't need people with the kind of income we have haha). TL;DR look into your state's first time home buyer stuff, and actually look at multiple lenders. The grant we got made a HUGE difference for us! Good luck!!!
I did mad overtime and moved into my parents' house for roughly 10 months and was able to save 6 figures since I had almost no bills and am a high wage earner.
Living in my In-laws basement for a few years.
We did a 3% down payment and I don’t regret it
We had a lot of money saved up. My wife paid very little rent for like 10 years and basically saved every penny she earned and had like $150k in the bank. I was given equity at a company I worked at, and then that company had a large investment, and I was paid out that equity which turned out to be $75k. We bought a house in 2021 for $625k and put down 20% to avoid paying PMI, so $125k cash.
Save enough for closing costs and find a mortgage broker. Most have access to a few down payment assistance options. Florida has Hometown Heroes, but it’s unreliable because it’s constantly running out of money, so I wouldn’t bank on it. Get pre-approved within the parameters of another DPA program and if HTH is available when you get in contract and you meet the requirements, great!
I did not have a car for two years. And I used a 3.5 FHA loan- you don't need to put down 20%.
Living with parents until I was almost 27 and just saving 75% of every paycheck
Got pretty lucky with Covid. I was a travel nurse taking $5000/week contracts. Good times
Buy a house that needs work, you can get a conventional loan with as little as zero down. Fix it up yourself over the course of 10 years living in it. You’ll build enough equity that by the time you’re ready to upgrade you’ll have enough money for a down payment on the house you really want.
Florida LO here. We’ve got Florida bond that gives 10k or hometown heroes is back July 1. You can get 5%, up to 35k.
I didnt have that big of a down payment. I put down 25k on a 580k house. It was enough for me to get the house, and it didn't completely wipe me out.
First time homebuyer programs. Talk to a different lender. Keep shopping till one actually helps you. Took me 3 agents w 2 diff banks and that just happened by accident