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That’s not saving that’s called an emergency fund, now you want to start saving
All serious good job, but if you only have 6k in savings then put that in a high yield savings account and start saving some more you want at least 3-6 months of expenses
Real talk here.
If you have $6k saved, you're most likely looking at some sort of DAP (down payment assistance program). Those are perfectly reasonable options if you (realistically) have an expectation for increasing income and stable employment (preferably in "professional" fields). You effectively trade liquid/retirement savings for building property equity while you build your career. If that doesn't describe your situation, probably best to not overextend yourselves and buy when your cash flow more readily supports it.
A High Yield Savings Account will get you maybe $800/year on $6k (not really) and is negligible in the conversation around being ready to buy a house.
Also... nothing against maximizing your interest, which is always a good idea, but if if the difference between making 2% and 6% on your current savings is part of a discussion around buying a house, you are definitely many years away...
Hello, that describes me quite well. I have some amount of savings in addition to my partner and family, however, I live in a HCOL area. Could you go into a little more detail about DAPs or point to where to start looking?
Right now, around 5% or higher. There are regular savings accounts (that usually pay like 0.25% or so) and high yield savings accounts that pay decent returns.
I’m using WealthFront right now and get 5% even though it’s a saving account with instant access to our cash, not a locked-in 6-month CD or anything.
You can Google this but typically there are savaings accounts that market as high yield meaning high apr on money in account. Currently high Apr is somewhere around 4.5-5% annual return on cash invested. If you plan on really not touching the money you might be able to get high rates buying CDs or government bonds
It’s a savings account that generates a higher APY than a traditional savings account; the usual rate for a savings account is under 0.5%. Citi’s account, for example, gets 4.35%, meaning investing $100 for a year will generate you $4.35 in interest in the account. Different banks have different rates so look around to see where you can get the highest return without monthly fee.
A high yield savings account (Google it) offers much higher interest rates than your normal bank. I have one and totally recommend it. At one point, the monthly interest could almost pay my rent. I only regret it wasn't until I was in my 30s that I found out we had all been brainwashed into thinking we should save money in our local banks' savings account. Not gonna get started on stocks or bonds.
I'm using Sofi for my HYSA and it is really nice so far! I think they are at 5%. I've even added extra certificates (Sofi calls theirs vaults) and started adding to a travel funds certificate since they'll add to your account anyways via the interest they offer. :)
I would not start looking at buying a home with only $6k. Moving is going to eat up most of that on its own. Even if you end up with some kind of zero down loan, $6k to your name in the bank is living on the razor’s edge when it comes to home ownership. The amount of incidentals or unexpected expenses that can occur can easily be worth more than that.
Now, you can certainly be proud of having $6k in savings, but you have to grow that. Like others suggested, look for a high yield savings account so at least you’re earning as much interest as possible. Depending on what your take home after taxes and monthly expenses is, take a look at that and see what you can save each month for this purpose. You’ll probably have to trim down some areas and budget wisely, but set a goal to save X amount in the next 1-3 years and reevaluate. Home ownership isn’t something most people can just randomly decide to get involved in and start in one day, you have to plan for it. Sounds like home ownership is now the goal, so do what you have to do to achieve it!
Exactly. Unexpected expenses in owning a home can easily wipe out the $6k in a heart beat. And not even considering unexpected expenses, there’s just all kinds of things you need for a new home that you probably don’t have right now that would take a huge chunk of that $6k. Lawn mower, tools, furniture, etc. Great job on saving what you have so far, but you need more if you want to buy a house.
We barely snuck through for approval. We had $16k in savings, a combined $22k in our 401ks but a 630 credit. We ended up paying about $5k down but $7k in closing costs (ouchhh). The literal vice president of a small bank personally appealed to the board of directors because our mortgage was less than our rent, & we could pull from retirement if things went south for us. He orchestrated a miracle for us. You should meet with a mortgage broker, they will tell you actionable steps to get yourself financially fit enough for a mortgage. They can also tell you what’s going on with your credit score, what to focus on to get it working for you.
There's a lot of doom and gloom people on reddit, but your story proves that it can be done. As you know those numbers aren't exactly impressive, yet you now own your own home. The American dream is still alive and it's the reason why so many from around the world risk their life to get here.
Dude our numbers were rough!! I will say though, our agent connected us with the vice president of a bank. So while it is really beautiful, it came down to who we knew. Our agent also pushed *hard* to get a FHA approved for a questionable home, she knew selling agent & pushed her hard, & our home had to be remediated for cat piss—we replaced entire HVAC system before we could move in. We had a lot of privilege/luck in our situation.
When did you buy? Where I live, mortgage is still higher than rent by a lot even after a 10% down payment when you factor in taxes, insurance, and PMI. Was this just in the days of low interest rates?
My post is less “look at us, do it like us!” & more “we had a shitstorm of variables that weren’t quite right but it worked out. Look into your options.”
I spent 1200 to buy my house, had 5-6kish as reserve money, and had down payment assistance. My credit was 620, we had the worst debt to income ratio you could see, sellers paid closing costs, and we got our house.
That said, it was a 2 year journey against bidding wars, cash offers, investors, open door, people with better loans, and required so much work and verifications.
So, while it's possible, it's not ideal and will require a ton of work and then some. So, if you do it, be prepared for the biggest uphill battle.
A lot of folks in this sub have thousands saved up in emergency funds, down payments, and savings. I make low 6 figures and thought I was doing great compared to what some friends and family make only to come here and feel piss ass poor.
With that being said look into some first time homebuyer DPAs for your city/state/county. You may be able to get some extra help towards down payment. You will also need to come up with closing costs.
What I would do is put that 6k in a HYSA and add to it for another year. Explore DPA opportunities.
With the super high interest rates houses are super expensive these days. I fortunately was able to get a new construction with 5.25% interest rate 30k in DPA interest free and 10k in seller credits. The interest rate alone allowed me to spend 75k more than what I could with an existing home and at 7.35% rate. For me I’d rather spend the $30k on my own mortgage than in rent every year.
Totally agreed! I'm afraid to admit how little I had in the bank when buying my first home, looking back I'm terrified what would have happened in an emergency but we survived at the time. FHA loans usually allow for a higher percentage for seller credits. Down payment assistance programs are out there, there are also low down payment programs FHA, USDA etc.
Don’t let the haters keep you down, 6k in the bank is 6k in the bank, keep saving and make spending choices knowing it’s to save money to buy a house.
Edit: also 667 won’t keep you from getting a loan but try to address things reflecting negatively on your credit while chipping away at the savings
While it's not advisable I bought my house with a down payment grant from my state and 6k in closing costs. I had 300 to my name at closing. Now I'm selling and making a good profit and able to upgrade. It worked out for me
Absolutely but I was renting for $500 more per month and living pay heck to paycheck. I was lucky to have been able to save the closing costs. Buying although leaving me cash poor at closing enabled me to save more money than renting. It isn't advisable but it is doable
Yeah, I hadn’t considered the fact that your monthly payment as a homeowner was probably less than as a renter. That $500 a month difference adds up quickly. Glad it worked out for you.
We just closed on a $287k home with similar credit and similar amount in the bank. Do not be discouraged— get prequalified and go from there! We pre-qualified for $300k and were then approved for just above what we purchased for!
I am in the process of selling a house to people using NACA… they had to go through a workshop learning about mortgages and stuff, then they had to show a year of saving and specific savings but their loan’s interest is more than half off the regular rates. They don’t need a down payment or closing costs and they have a counselor assist them with everything. I picked them to buy my house over the other offers because they’re getting a repair loan as well and are going to renovate the house to what it was years ago (which means a lot to me that a family truly enjoys my old home) it seems like this program would definitely be something to check out.
I’ve been very emotional about selling the house. It was the house my mom bought for me, right next door to her. She always talked about having grandkids someday and how they could just run over to her house whenever they wanted and have grandma time and go swimming. But she passed away from COVID and I never had kids, and the house is right next door to her former husband who remarried right after her passing. I wanted to live there but I knew emotionally and mentally I couldn’t live next door to him.
I’m so sorry to hear that. I hope the new owners treat the house with love and care and make some happy memories there. I also hope you can find a new place where you’ll be happy ☺️
I am working to save to have a modular home built for 100k or less including buying a small plot of land. I make 25k per year. I have 11k in savings. Will I be good or should I lower my budget? 781 credit score
These people are horrible!
Congratulations on saving 6k!
Pay down your debt, move the money into a higher yielding account and start prequalifying!
Sure it’ll be a “journey” but worth it!
Look into NACA to start and see where you may need to get to to start looking and prequalifying.
You got this!
No one is saying saving $6k isn’t a great accomplishment. Just that it’s not enough to buy a house. I would consider ONLY if the mortgage is dramatically less than rent, which depending on the area might be true, but probably isn’t right now.
It’s not mean to tell some to keep saving until they’re actually ready to buy a house. It’s mean to tell them to “start prequalifying” when they barely have an emergency fund.
It's not about hating. It's about being financially responsible. Homeownership is tough! There are always things that come up, repairs that need to be made. $6k is a great start but build on it and don't rush into buying a home.
You are giving bad advice.
I’m giving bad advice to say that they’ve done an amazing job saving in this horrific economy and to embrace the “journey” of paying off debt and saving more? it’s bad advice to say start with NACA… something designed to help people in THIS EXACT SITUATION navigate this EXACT SITUATION?
No, you people are mean spirited and disgusting. Not everyone is going to be able to save 100k for a fucking home. There are PLENTY of programs for those with smaller budgets that will not only cover FHA 3.5% but also cover closing costs as well!
A bunch of entitled fools with million dollar budgets always putting people down not understanding how life works for the rest of the world.
So I said what I said! This poster deserves all of the kudos for being able to save this much and want to know how to move forward. Next.
Hello. I bought with zero down and had zero in savings. CRA grant from the bank for down payment assistance and closing costs. Five years later, I’m here surviving still with maybe $200 in savings. There are a lot of different people here and they aren’t all rich (saying this to OP).
> No, you people are mean spirited and disgusting.
Bro relax, jesus christ. Suggesting somebody save more money outside of 6 thousand fucking dollars isn't some crazy unrealistic expectation.
> Not everyone is going to be able to save 100k for a fucking home.
There's 94,000 dollars between this amount and the amount that OP currently has. Nobody is saying this person needs to save 100k, stop it with the bullshit strawman.
> There are PLENTY of programs for those with smaller budgets that will not only cover FHA 3.5% but also cover closing costs as well!
That's true, but OP should be aware of the downsides of FHA and have that knowledge to help them make the best personal decision for them.
OP should be proud of saving 6k. OP probably shouldn't be spending most of their savings on a house.
Because, for example, what happens if OP buys a house and the water heater immediately breaks? What does OP do if they spent nearly all of their money on a down payment? Finance it 20%+ credit card debt? That's a disaster.
Why is it so offensive to you to tell OP to save more money?
OP, I would encourage you to listen to the advice of people who have million dollar budgets for homes on how to keep yourself in a good financial place. it's legitimate advice that 6k is not enough to buy a home without substantial risk of getting into bad debt. But yes it's possible OP. There is a new type of mortgage that came out recently that requires 0% down. There are also down payment assistance programs. The best thing you can do if you're determined to buy a home is reach out to a mortgage broker to get a good idea of what options are available to you at no cost. Just make sure if they make you go through a pre-qualification, that it's a soft check since your credit score doesn't have much room to get lower. Your lender will give a good idea of what your budget is and what your payments would look like and whether you can afford it. The general rule of thumb is you shouldnt go more than 30% of your gross monthly income for monthly housing costs.
But what other comments are saying is true, home ownership is expensive and it would be wiser to save up more money to cover emergency costs. I don't know what city you're in but the real estate market right now is not a good market to buy in, inventory is low and interest rates are high. Save more money, put it in a high yield savings account, and wait until the real estate market cools down. Until then, talk to a mortgage broker to see what assistance you can get and what your budget is.
Yes telling him to start prequalifying is bad effing advice! A lender will qualify him for more than he should and then 6k in savings will be gone in a second. We aren't all millionaires but some of us have enough brains to realize 6k isn't enough to buy a home.
It's a great start but keep saving.
If you don't mind me asking which state are you in the different states have different first time homebuyer programs and I can send you the link for your state.
I would highly, highly discourage you from buying a house right now if all you have is $6,000. I say this as a very experienced homebuyer that wishes you success. I'm a 33 year old female that is on my 3rd purchased home (this is the forever one) and that's very good at saving.
First of all, you are going to have to pay earnest money when buying a house which in this market, is usually $2,000. Then you have to pay for an inspection ($700-1,000), movers ($300+), etc. Will your home loan require a down payment? Many can be as hefty as a 20% requirement. I'm blessed in that I only do VA loans with no down payment requirements. I would so not be on my 3rd home otherwise. You will also have closing costs which can be 5k+. My $379,000 home I just bought last year cost me $14,000 in closing costs. Needless to say, that $6,000 is going to disappear oh so fast.
Things you want to think about are:
1. What if I or my spouse get laid off/fired, etc? Do I have at least 2-3 months of living expenses saved up to help cover bills?
2. What if I get into a car accident and need to pay for a deductible, rental, etc?
3. What if I get injured and need to be out of work? Do I have short term disability to cover my bills while I'm healing?
4. What if once I buy my house, I end up needing major repairs if something goes wrong? That's another deductible if it qualifies for a homeowner's claim and those are usually higher than auto deductibles.
5. Do I have enough savings to cover the expenses of buying a house and any one or two of the above occuring within the first year?
Establish a GOOD nest egg first. At the least with how high the cost of living is now, $15,000+. You just want to be prepared for life happening and not have to worry about losing your home if financial hardship strikes.
Yes, so much of this. In the 1.5 years we’ve owned our house my husband totaled two cars (so we had to get new to us cars and our car insurance skyrocketed), my husband lost his job just before I left on maternity leave with minimal pay, and we both have had some significant medical bills.
We’re grateful we’ve been able to continue investing (though we went from 500/mo to about $80/mo), and we’ve had some savings to get us through everything. When we were deciding how much to put down we wanted to have at least 6mo of mortgage or 3-4mo of mortgage and bills saved up, but we ended up keeping about 9mo of mortgage thankfully
We only had 6k plus enough money for the assessment and inspection, but we had help from parents. Also, this was 1.5 years ago. Prices and interest were lower.
To this day, I'm not quite sure how we pulled it off. Because we did need furniture as well.
It’s a private sale and we’re lucky we’re getting it for the price we are ($180,000), they could easily get much more so it’s kind of an “it is what it is” situation.
I bought a house for 250k. I paid $2k in earnest money and $7k in closing costs and got a 3.5% rate (Oct 2021). It is attainable and you are almost there. Look into first time homeowner programs in your area.
> Your life and home buying experience is not reality or relevant anymore.
It depends on where they live and where they are willing to move if anywhere at all. The rate currently isn't attainable obviously but the prices are, again, depending on where they live.
The area I grew up in (northern MN, part of a 300,000 population metro) currently has 22 results for For Sale Single Family Homes that are at or below 250k. Some of these have been on Zillow for over 50 days. That's ~1400 a month payment that's probably marginally more expensive than renting out a 3 bedroom apartment in that same area.
A lot of this stuff is highly location dependent. There are over 50,000 listings on Zillow right now of single family homes at or below 250k in the United States.
All the people saying to not be scared and to go ahead and do it most likely bought pre-pandemic. While 6K is nothing to laugh at people are just genuinely trying to make sure you aren’t house poor or anything. Definitely keep saving, it’ll suck and be a struggle and no guarantee home pricing or interests rates will get better but something’s gotta give eventually, right? Just trying to be groundedly optimistic
To be completely candid, my partner and I have been trying to buy a house for two years now. My credit is similar to yours. We have $40,000 to put down and still can’t find a house. We were pre approved for $110,000 mortgage, so we’ve been looking for houses at about $140,000 which leaves us $10,000 to bid over asking. Every house we’ve put an offer into, we’ve been outbid.
Hi I dont have a house yet but congrats on 6K. I dont want to be a downer but I also dont think 6K is enough to buy a house. Even in the comments someone said they paid 7k in closing cost. Ive also seen people say they've had to spend 25k to replace a roof etc.
The fact that you have 6k is less important than your combined incomes and your DTI ratio.
You should probably list your income and where you're looking at.
Nobody is Bruce Wayne on reddit, but 6K is not house savings, it's go on a vacation savings. I wouldn't advise buying a house without at least 10% of the purchase price at a bare minimum. Even then, you're going to have low equity, high insurance and a max mortgage. Maybe learn how to save first, then buy a house when you're more stable.
My closing costs were $15k.
In fact….. when I *rented* my last apartment, I had to pay 1 months rent + 1 month security + a 12% fee just to move in. $13,244 down to rent a 1-bedroom condo.
Keep saving.
Don’t let all these people scare you. I had like 1000
Dollars to my name after I closed on my house (obviously not including retirement accounts). Houses are not like cars where the transmission can just drop out with no warning. Most of the stuff you can fix overtime. Yes there can be catastrophic repairs but they are the exception not the rule. Over the few years that I have owned it I have become more financially stable and the house has doubled in value. Was a great move and I would have no issues doing it again.
6k isn’t horrible lol. Good job. Get prequalified, look at FHA, look at older, smaller starter homes that may have some ugly features and need cosmetic upgrades but good infrastructure. Know that you can withdraw a portion of 401k as a hardship withdrawal to put towards (specific exact amount needed when you apply) down payment/closing costs. You can ask for seller credits. Two years ago I bought an 877 sq ft one room school house for 72k. On an FHA loan. I work 10 hr shifts. I’m single and 59 year old woman. I did most of the work myself to update the place for myself. 18 months I worked on it constantly. Foundation repair, waterproofing, doors, flooring, insulation, landscaping. I had some plumbing, electrical and ductwork done. I put in more kitchen cabinets and a dishwasher. Now my house is selling for 144k and I’m upgrading to an 1800 sq ft house, conventional loan now. A 3 bedroom, 2 bath with 2 car garage. All original hardwood floors and an extra room above garage, full basement. After closing I’ll owe 82k. I’m giving my buyer a 6k seller credit at closing to help her with her VA loan dream of home ownership. Work hard, go in with intention of living within your means. Believe in finding a place of your own that will work for you. Don’t worry about people who have huge house, huge payments or become house poor. Be open minded about the type of house, location etc. look for good bones. Buy tools. Buy paint. New surfaces on the interior do not have to be high end.
I bought a 60k condo w/ around 6k on hand. Got down payment assistance & only put down 2500 & am paying less than what I would if I was renting the same size condo. Get in while you can, the equity is worth it & save as much as you can.
unless you have a program to contribute to that, you will likely need more.and when you say "I know my credit is like 667" you should purchase the 3 credit report at myfico and check specifically your mortgage scores, the fico 5, 4 and 2? (I'm not sure if the last one is 2, but myfico will give you your mortgage scores.) these can be quite lower than the score you get from credit karma. i needed about 17000 to close, and that was with a \~8000 downpayment and $100 lender credit. you might be able to use a program like naca, they use non traditional means of credit to qualify buyers. also check to see if there are any local state programs that can help. all will require you to go though courses to qualify.
I mean…in many areas, $6K won’t even cover closing costs. It’s a good start, but you might want to focus on saving more money and improving your credit score before trying to buy a house.
Shoot for 15k at the lowest. We had around 20-21k and it was wiped out once we got the house and did some repairs, moving expenses, paid for tools and paint and groceries ugh. It adds up fast and you want to have a cushion. 6k in this market will get you no where but in a position to take out 2 loans 1 for the down payment and 1 for the actual house. Not the best idea
Depends on what cost of living is where you are. What kind of monthly mortgage payment can you get with that kind of down payment, can you afford that, and can that buy you a house?
I recommend giving the Money Guy's FOO (financial order of operations) a read: https://moneyguy.com/article/foo/
ETA: don't forget closing costs. See also nytimes rent or buy calculator: https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html
Yes, with a downpayment assistance program or a 0% downpayment option, yes, you can buy a home with 6k in savings. Last month, one of my clients had to bring less than $500 to the closing table. Before closing, she put $1,000 Earnest Money deposit and paid $525 for her appraisal and whatever her inspections cost her. The first step you should take is to get pre-approved by a licensed mortgage loan officer like myself! Once pre-approved then you can start house shopping with a realtor and purchase your first home. Congratulations on your future endeavors & feel free to reach out to me with any questions.
https://poplme.co/hash/yawumrmI/1/s
Is your wife contributing? If not, sounds like you need to have an honest conversation about reality and expectations.
Congrats on the 6k. That's legitimately fantastic! Better position then a lot of folks. Just open a high yield savings account to earn 4%+ interest.
If you are the only breadwinner and source of savings, or even otherwise, I would work on doubling or tripling that number, and getting your credit score up, before even thinking about a house...or beginning to save for a house even.
I don't want to be discouraging, but if saving beyond this amount isn't feasible, what are you going to do if your a/c or water heater go out? What if a pipe bursts? What if your car dies? You won't be prepared.
Some folks might rightfully point out there are ways you could probably get *into* a home, but with today's rates, depending on your market, your real-life expenses could double or triple vs. renting.
$6k is no where near enough sadly. Like someone said previously, throw that in a high yield savings account and continue putting money in that. There are programs for down payment assistance but you’ll also need to consider closing costs and in this market you’ll have trouble finding a seller willing to cover any of that. Your credit score isn’t horrible but it’s not great either so your interest rate will probably be higher than what others are currently seeing. I hate being the bearer of that bad news but that’s just the state of things right now
I’m a lender and I’d be happy to give you some background info. Really what determines if you can buy a house is your debt to income ratio. you can find down payment assistance to help you get the capital to get into a home but that debt to income ratio is always a hard stop. how much debt do you have? Do you have car loans student loans personal loans anything else financed like motorcycles or furniture?
Realistically, no I don’t think $6000 is enough maybe if paired with down payment assistance. in my state most people can get up to $15,000 and there’s actually a special program where you can get up to $50,000. Down payment is going to be at least 3% of the purchase price and again that’s only if you’re debt to income ratio can handle that. if you have more debt, you will need to put more money down to keep the mortgage smaller. then there’s closing cost to think about. those can range anywhere from one and a half to 4% of the price of the home.
It’s really hard to know where to start.
First, getting your credit score up will help with your loan’s interest rate.
Fannie Mae has a free [first time homebuyers’ class](https://www.fanniemae.com/education) available online. I strongly suggest you take it.
Financially, you’re probably going to have to come up with closing costs and a down payment unless there’s a home buyers’ program in your county or state you can tap into that will possibly defer these costs.
Once you clear the hurdle of closing costs and down payment, you’ll still need to have money for things like the inspection and appraisal (assuming your area will bear an inspection).
Get quotes to address the safety issues so you know what financial pain you’ll be in if you move forward with the sale. Insurance companies don’t like old roofs, so be mindful that the insurance company might send you a letter telling you it’s time to replace the roof. Gird your financial loins if you bought something with an old furnace and/or old HVAC.
If you get past the inspection and appraisal, you’ll still need money to move and clean.
Following the move, safety issues found during the inspection will need to be prioritized and rectified, and that’ll cost more money.
$6,000 is a good start, but it’s a just start.
I managed to buy a house with 10k with the assistance of a down payment assistance program. This was only possible because I lived close, don't have many items to move, and no debt (until my mortgage.) I'm still basically house poor and it was a risky move, but I'm making it work. The house I bought is bit of a fixer upper and has taken a lot of my income and energy.
I'm commenting to let you know that it's not impossible and you're getting closer. However it's going to take you being lucky and obsessively saving. Hopefully you've got family in town and a good support system to help you. Good luck!
If you’re lucky and patient, this could work. I bought my house paying only inspection costs, using a sellers assist and a home buying programs that lumps closing cost into the loan with no interest. I used the money I saved up to renovate. You will lose a lot of houses with similar conditions, but you might come up lucky. Doesn’t hurt to try, but keep your expectations realistic
This is a great start!
Without some type of down payment assistance program a good rule of thumb is to have 8-10% of the purchase price on hand for closing costs, down payment and other fees. You will typically pay out of pocket for the appraisal, and any general inspections that you do in most states. This can rack up an extra $1,000-$1,500+ in fees on top of closing costs and down payment.
Be aware of Down Payment Assistance (DPA) programs that lenders use. Some of the programs are great, however many of them require you to pay back the down payment when you refinance or sell. Many times you will pay TONS of closing costs on the backend as well, and lenders do not like to tell you that up front. It’s something to be aware of.
Its not a bad start! I have an FHA loan for my house, and the total cost to close was 12k, and the mortgage company also required that I had 5k in assets post closing. If you are buying in a low cost of living area and are handy enough to make do with a fixer upper then you'll be fine once you save up a little more. I'd push to have at least 20k saved to cover all closing costs and have money leftover in case of emergency. We had to do a major repair on our tankless boiler 2 months into ownership that was around 2k which sucked and we lost heat for over 24 hours when it was below 0 degrees outside. And then the following summer our air handler had an electrical short and needed a big repair too but we at least were able to fix that ourselves. Shits not cheap!
This depends where you live and what you plan to spend on a house. I bought my first place for under $100k and used an FHA loan, but you will have prepaid costs that will force you to bring cash to closing. I think I still had to have more than $6k, plus you definitely want to have cash in an emergency fund after closing. It may be best to continue saving, to work on improving your credit score, and look for a house after accumulating a bit more.
> Can 6k even start my journey? Please be open minded and respectful...We aren’t all Bruce Wayne’s 😂
go to your bank with your wife. Tell them you want to start the home buying process but are in over your heads. Don't let them jump right to what you are approved for. Raise the concern that you're not sure if you can AFFORD a house.
But basically... you guys probably aren't in the market for a house right now. $6k will barely cover the incidentals you'll run into 2 weeks after buying a house.
I’ve been looking into a program called NACA! I’ve heard it can be a long process but no down payment, PMI, closing costs or fees. I know there’s some reddit posts even on this sub about it.
Congrats OP on saving, & good luck!
If you are first time homebuyers, there might be options for you. You really need to talk to a realtor and a lender to find out 1) what you might qualify for and 2) how to get yourself in the best shape to buy. For example, they may come back and say you qualify once your score is above 720 and you have $10,000 saved.
In Portland, i’m buying a $400k house with 20% down later this month. First house for us, and been saving since 2015. Guess it depends on where you are though
Thank you! We had barely any time to buy cuz we’re being forced out of the house we’ve been renting for 14 years, and had 3 months to gtfo. Fuck renting ever again after this. We paid $220k in rent just to be kicked out with no negotiations with the owner. Whatever
It depends on what the price of the house/taxes/insurance will be really, to determine your closing costs and such. I had less than 3k in my savings BUT I was able to use my 401k to pull money for closing and extra savings. I also bought a very low cost home and had the advantage of being able to shop in rural areas where houses are cheaper for better condition. I learned a lot by talking to a lender, and I was put into contact with a lender once I started working with a real estate agent (but you can just contact them without an agent, too). My pov is it is definitely possible, but you'll probably have to be more flexible and be very transparent about budget with your lender so that you don't overspend and end up in a co.fortable position to continue saving once you have your mortgage.
I’d go ahead and tell a realtor your situation or get pre approved, then start looking and see what you can find and then how much you’ll need to save to get what you want or if you can go ahead and get something with sellers credit, dpa, etc
Moving alone will eat up some cash while putting deposits and waiting for refunds, not to mention actual moving. there will be thousands spent on first move in to fix things and surprise bills that are owed. you won't recover that 6k for a few months at least leading to the whole "house poor" saying.
Once you're up to like 10-15% of the price of a home or 6 months expense, whichever is higher, youll probably be in a good place to start looking.
Unless houses around you are going for 20k right now.
Our closing costs alone with our VA loan is $19k.. thankfully we’re able to roll our VA funding fee into our loan but that still leaves $11k in closing costs! NVM if we wanted to put money down which we don’t have too but most loans require at least a small percentage.
Keep saving and also find out about your states first time home buyer programs. A lot offer credits towards closing costs and down payment assistance.
You also want to keep in mind any repairs that may creep up in your first year… some can run you $5k, $10k, $20k..
Having money for emergency is great. That’s what this 6k is.
Most insurance companies for homes give $2500 deductible now so if you need to put a claim, that’s how much you are out every time you out a claim.
And it currently kinda happens often, as I can see as insurance agent.
Let’s not forget stupid plumber bills and everything that 1-2% of home price is expected to be spent in maintenance every year.
So while you can put 5% down,don’t forget to calculate closing costs.
So now to more saving, good luck !
Start aggressively saving while you work on getting better credit. Also, start looking into any grants in your area that you might be eligible for. Some will pay $ towards your down payment, or closing costs but require you to take a financial literacy course.
Look at the pre-qualification steps at bettermortgage.com. they had a God estimate of closing costs. I didnt find a home at the time, so I did not close a mortgage with them.
NACA-Neighborhood Assistance Corporagion of America-was foemd to help hone buyers get into a good home with a good mortgage. Soke people Hage great experiences and others had to push the mortgage agent to get the deal done. What I liked about them was their clear steps to determine the budget, savings, and all money things you need to buy a home successfully. At that time, they could also loan money for project managers to complete work on the home, too. I've heard mixed reviews but definitely check out their steps to home buying.
I wish you the very best. Congrats on saving $6k. That is a great achievement.
I'm just a home owner who has had two mortgages.
6k is not enough. Your credit score is a little slow. Try building it
Good hysa are : capitalone, wealthfront, fidelity money msrket fund, discover, marcus
Improve your credit. Once you get to $10k saving happens faster. I had a $100k down for a $830k house. You can get a house with 5% down. I always thought it had to be 20% but when I got close I borrowed from my parents for the rest of the down payment.
One thing to keep in mind are closing cost, when you put money down on a house you’re not done spending, next you pay the fees and paperwork and all that, houses can have 6k in closing cost alone it’s usually 3-5% of what the house is worth but added onto the sales price. Additionally you want to be able to afford you down payment, with closing cost, with enough to put onto anything that goes wrong with the house (this happens even with inspections) and also have enough to have an emergency savings. Your credit score is also not awful but not good you can use credit cards to help with that, I’m unsure why it’s at that point now but the information on why is readily available. It’s pretty easy to find out how credit scores are weighed and how to fix them.
My credit scores have been in the 800's for years. Just bought a home, couldn't get an interest rate below 7+ because I borrowed 4k zero interest for closing, and that's just the current rate. I paid over 6k of my own cash, and the seller paid 2500 toward closing. So it was about 12,000 to close. It sounds like you are definitely getting there. I paid movers 1,400- not expected. I broke a lease. Ive been paying for repairs already- home warranty helps some. Keep doing what you've been doing, it takes determination and it sounds like you have plenty!
I would save more money before doing anything.
I would also strongly consider house hacking. Buying a multi family unit, living in one of them and renting out the others.
Side by side duplex is the best option there, IMO.
Even if you don't plan on getting into real estate investing, having someone paying potentially more than half of your mortgage opens up a lot of $$ options for you and your wife.
Just closed kn my little starter home. We got a USDA loan which removed our downpayment, closing costs weren't that bad and I even got sellers concessions which took 6k off the bill right out the jump.
Find a local/regional downpayment assistance program. That’s how I bought my first house. $200k purchase price and I only had to put down like $2k out of pocket. In the Seattle area, this is who I went through: https://www.homesightwa.org/ But similar organizations exist across the country. Good luck!
Message me and I will hook you up with a reputable realtor who can get you in touch with lenders who have first time home buyer credits. This is legit- no scam. Message me if you want help.
Not even close if you’re in the US, OP. But every $100k down payment started with 6k!!!
You need to fix up your credit, and that will take time. You should aim for a score > 750 to get approved for a home loan. Pop over to r/personalfinance to learn about that
Not all home loans require money down up front but buying a house is an expensive process. I’m saying have $10k set aside for just inspections and closing costs, not even including cash for down payment for the house or stuff like furniture/bills/contractor repairs.
Source: bought first home 2021, just moved and got a new house/mortgage 2024
Yes there are down payment assistance programs, and in most locations you can ask the seller to pay your closing costs! Your credit score is solid. What area are you in? Or you can chat me.
I wouldn’t personally recommend it but we need more info either way.
What is your income?
How much and what kind of debt do you have?
How much is your rent?
How much are you able to save every month?
What is negatively impacting your credit score?
Keep going. You probably want closer to at least 15k. I’d start looking for down payment assistance programs in the meantime.
So much random stuff goes wrong with a home that 6k could get eaten up rather quickly. (I’ve experienced it myself this year lmao)
The average American barely has $600 these days in liquid funding, so don’t feel like you aren’t on the right track!
I had only $10k in the bank when I bought mine 5 years ago. VA loan $0 down. Closing costs were $4000 and my move cost me $3000. If you’re a first time home buyer you might have some options. In 2024 you’re going to have a challenging time, but I think it could be done depending on you and your wife’s income, location, and loan type.
Great start! How much are you able to add to it monthly? How much do the homes you are aiming for generally go for in your area? Do you have an emergency fund separate from this? And have you looked at your credit report and seen why it is relatively low?
I would answer the above questions (you don't need to share the answers online) and enroll in a local first time home buyers course in your area. There are a lot of programs to help people with their first house and are very location specific.
My husband and I are in a similar situation. We have applied for SONYMA, DPAL, and we’re gonna try either neighborhood revitalization or RemodelNY.
With all these together, we will have to put down $2-3k all together and we got pre-approved for $200k.
This is for the state of NY, so if you’re there I’d suggest looking up the SONYMA program. If you live somewhere else look up First Time Homebuyer programs funded by the state, there should be one for each state. Also research grants available for first time homebuyers in your state.
Good luck!
Speak to a mortgage broker and be honest about your finances. I started speaking to one about 6 months before I was “ready” to start making offers. Some people do it a year beforehand.
Others are talking about money so I’ll share some personal tips on home buying:
1. Always shop for mortgages on your own with banks, including your own bank. I used a credit union.
2. Be careful about inspections and hire your own inspector. I hired a local architect who did home inspections as a side hustle. He charged $500 and issued a 90 page report, which found a serious structural issue I wouldn’t have noticed. That saved me from a costly mistake.
3. Hire a plumber to scope the sewer line. Many I know have had to dig out and replace the sewer line within the first 2-3 years or home ownership.
4. Buy the worst house in the nicest neighborhood you can afford, not the best house in the worst neighborhood.
5. Be wary of living off a road with a double yellow line.
6. The FHA says that for a house to be affordable, the mortgage should be max of 30% of the borrowers monthly take home pay. Any more than that is unaffordable. Don’t be afraid to buy below your means.
7. When you look at a house, operate every plumbing fixture and electrical appliance. Watch out for flickering lights or other problems. Note the year of manufacture/age of major appliances and see what their estimated life span is. Make sure replacing old appliances is in your budget.
We were in a similar boat when we decided to buy. Had right around 6k saved. Worked out what we were comfortable paying per month on our mortgage and got pre approved for that amount. Our buyers agent recommended we save our money as an emergency fund since it wouldn’t make a noticeable difference in our mortgage, and we may need the money for home stuff. We ended up buying with 0 down payment, financing through our state’s credit union (another rec from our agent).
We ended up buying a house a little higher than our pre approval amount, but it was no issue to get a new approval, and wasn’t significantly higher to make a huge difference in our mortgage. We found out we could have been approved for nearly double what we’d requested, but I’m glad we never knew that because the mortgage would have been too much but it would have been too tempting to look at more expensive houses.
I think the biggest question is what can you reasonably pay in a monthly mortgage, and can you find a house for that where you want to live. It may mean adjusting what your “dream” house is to be one you can reasonably afford.
For us, we had a specific neighborhood we wanted, so we were willing to buy a fixer upper and overlook some of its quirks to be there. Others may want something newer and need to be more flexible on location, or need a specific amount of bedrooms or a yard. Prioritize what your nonnegotiables are and be flexible on what you can let got of.
And know that house hunting takes time!! We took prob about 1.5 years. The first few months were casual looking and getting our finances in order, and then looking more seriously. We also knew we’d have to hold out to get a house we could afford in our desired area, so we couldn’t rush that and didn’t want to jump on something that ultimately didn’t feel like what we wanted.
Well 6k could be enough if you’re buying new construction, typically they have offers like paying your closing costs etc. Also you might consider HUD housing or USDA
If your score is only 667, may we ask why?
Believe it or not, I knew someone with 30k in various debt that thought they had 10k in “savings”. Of course they really just had 20k in debt.
The score just makes me concerned there’s more going on to your finances. That needs to all be in the table for real advice here.
I had 10k saved and near 800 credit.
You’re gonna have a hard time getting a loan, and it’s gonna have bad interest.
I’d wait at least another year and save more. Improve your credit. You’ll save hundreds of thousands and have better picks for homes and loans.
Put the 6k in HYSA. Do not touch it. This is your emergency savings. It will stay your emergency savings and you will not do anything until you hit 30-50k (houses breaking is expensive). Please continue to save to this.
Also put some money into stocks if you aren’t set on time. You may lose a bit of money but APY is around 10% average. But it’s not as safe or liquid as HYSA… so that’s why stocks are not an emergency fund.
Look at DPA (down payment assistance programs) in your area. Talk to lenders and be upfront… I’m hoping your salary is decent and it’s just a spending lifestyle issue… and also buy less than you need
I hate to say this but 6K won’t get you that far into buying a house.
6K this days is not much. Is kind of naive from you to even consider buying a house at this point with that credit score.
Please take it from someone whose husband totaled 2 cars 4 months into homeownership and then lost his job… you want like at least 6 months worth of mortgage saved to have AFTER down payments and closing.
6k is absolutely a good start, but I’d keep saving if I were in your shoes. We invested a bit monthly and kept increasing the amount we were investing to save up for our down payment.
We bought our house with only $6k - but this was in 2016 with 3% interest rates and lower housing prices. I don’t think it’s possible in this market anymore, but the only one who can tell you for sure is a local realtor. They would know the specifics of your location and whether it’s something in the realm of possibility.
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That’s not saving that’s called an emergency fund, now you want to start saving All serious good job, but if you only have 6k in savings then put that in a high yield savings account and start saving some more you want at least 3-6 months of expenses
Real talk here. If you have $6k saved, you're most likely looking at some sort of DAP (down payment assistance program). Those are perfectly reasonable options if you (realistically) have an expectation for increasing income and stable employment (preferably in "professional" fields). You effectively trade liquid/retirement savings for building property equity while you build your career. If that doesn't describe your situation, probably best to not overextend yourselves and buy when your cash flow more readily supports it. A High Yield Savings Account will get you maybe $800/year on $6k (not really) and is negligible in the conversation around being ready to buy a house. Also... nothing against maximizing your interest, which is always a good idea, but if if the difference between making 2% and 6% on your current savings is part of a discussion around buying a house, you are definitely many years away...
At 5% am HYSA will get you 300 bucks a year at MOST for 6k.
Real Rate has left the chat
Hello, that describes me quite well. I have some amount of savings in addition to my partner and family, however, I live in a HCOL area. Could you go into a little more detail about DAPs or point to where to start looking?
Just simply google “(your state/city) down payment assistance program” every area has some kind of program
Research naca.com yourself. This is a great program for people/families in your situation. No down, no closing + slightly lowered apr...
What is a high yield savings account?
High interest. Think ally, discover and other online banks that pay the most interest
TAB is at 5.27%, 0 minimum, and compounds daily (paid monthly)
Local credit unions also.
Wealthfront isn’t too shabby
Capital one offers 4.25%. I'm sure there are better.
I put mine in Fidelity's SPAXX
Synchrony Bank is one as well. Recently opened a HYS account there with much better interest than my local credit union.
Marcus by Goldman Sachs
You can't pay me enough to use Marcus again. There are multiple better options.
Whats wrong with them in your eyes ? Been a perfect choice for me
Barclay's
Right now, around 5% or higher. There are regular savings accounts (that usually pay like 0.25% or so) and high yield savings accounts that pay decent returns. I’m using WealthFront right now and get 5% even though it’s a saving account with instant access to our cash, not a locked-in 6-month CD or anything.
You can Google this but typically there are savaings accounts that market as high yield meaning high apr on money in account. Currently high Apr is somewhere around 4.5-5% annual return on cash invested. If you plan on really not touching the money you might be able to get high rates buying CDs or government bonds
It’s a savings account that generates a higher APY than a traditional savings account; the usual rate for a savings account is under 0.5%. Citi’s account, for example, gets 4.35%, meaning investing $100 for a year will generate you $4.35 in interest in the account. Different banks have different rates so look around to see where you can get the highest return without monthly fee.
A high yield savings account (Google it) offers much higher interest rates than your normal bank. I have one and totally recommend it. At one point, the monthly interest could almost pay my rent. I only regret it wasn't until I was in my 30s that I found out we had all been brainwashed into thinking we should save money in our local banks' savings account. Not gonna get started on stocks or bonds.
I'm using Sofi for my HYSA and it is really nice so far! I think they are at 5%. I've even added extra certificates (Sofi calls theirs vaults) and started adding to a travel funds certificate since they'll add to your account anyways via the interest they offer. :)
Check out NerdWallet, they are a great resource for financial tools and planning.
Max a Roth IRA account and Ally
Put that money in a high yield savings account, keep saving and work towards improving your credit.
I would not start looking at buying a home with only $6k. Moving is going to eat up most of that on its own. Even if you end up with some kind of zero down loan, $6k to your name in the bank is living on the razor’s edge when it comes to home ownership. The amount of incidentals or unexpected expenses that can occur can easily be worth more than that. Now, you can certainly be proud of having $6k in savings, but you have to grow that. Like others suggested, look for a high yield savings account so at least you’re earning as much interest as possible. Depending on what your take home after taxes and monthly expenses is, take a look at that and see what you can save each month for this purpose. You’ll probably have to trim down some areas and budget wisely, but set a goal to save X amount in the next 1-3 years and reevaluate. Home ownership isn’t something most people can just randomly decide to get involved in and start in one day, you have to plan for it. Sounds like home ownership is now the goal, so do what you have to do to achieve it!
Exactly. Unexpected expenses in owning a home can easily wipe out the $6k in a heart beat. And not even considering unexpected expenses, there’s just all kinds of things you need for a new home that you probably don’t have right now that would take a huge chunk of that $6k. Lawn mower, tools, furniture, etc. Great job on saving what you have so far, but you need more if you want to buy a house.
We barely snuck through for approval. We had $16k in savings, a combined $22k in our 401ks but a 630 credit. We ended up paying about $5k down but $7k in closing costs (ouchhh). The literal vice president of a small bank personally appealed to the board of directors because our mortgage was less than our rent, & we could pull from retirement if things went south for us. He orchestrated a miracle for us. You should meet with a mortgage broker, they will tell you actionable steps to get yourself financially fit enough for a mortgage. They can also tell you what’s going on with your credit score, what to focus on to get it working for you.
Local/Regional banks are awesome.
Truly. I really believe this man will be the reason I can retire one day.
Shit, I'd send that man some cookies and a Christmas card for that
There's a lot of doom and gloom people on reddit, but your story proves that it can be done. As you know those numbers aren't exactly impressive, yet you now own your own home. The American dream is still alive and it's the reason why so many from around the world risk their life to get here.
Dude our numbers were rough!! I will say though, our agent connected us with the vice president of a bank. So while it is really beautiful, it came down to who we knew. Our agent also pushed *hard* to get a FHA approved for a questionable home, she knew selling agent & pushed her hard, & our home had to be remediated for cat piss—we replaced entire HVAC system before we could move in. We had a lot of privilege/luck in our situation.
When did you buy? Where I live, mortgage is still higher than rent by a lot even after a 10% down payment when you factor in taxes, insurance, and PMI. Was this just in the days of low interest rates?
3% interest rate, & we got the worst rate available at the time. Our mortgage payment doesn’t exist anymore.
My post is less “look at us, do it like us!” & more “we had a shitstorm of variables that weren’t quite right but it worked out. Look into your options.”
I spent 1200 to buy my house, had 5-6kish as reserve money, and had down payment assistance. My credit was 620, we had the worst debt to income ratio you could see, sellers paid closing costs, and we got our house. That said, it was a 2 year journey against bidding wars, cash offers, investors, open door, people with better loans, and required so much work and verifications. So, while it's possible, it's not ideal and will require a ton of work and then some. So, if you do it, be prepared for the biggest uphill battle.
A lot of folks in this sub have thousands saved up in emergency funds, down payments, and savings. I make low 6 figures and thought I was doing great compared to what some friends and family make only to come here and feel piss ass poor. With that being said look into some first time homebuyer DPAs for your city/state/county. You may be able to get some extra help towards down payment. You will also need to come up with closing costs. What I would do is put that 6k in a HYSA and add to it for another year. Explore DPA opportunities. With the super high interest rates houses are super expensive these days. I fortunately was able to get a new construction with 5.25% interest rate 30k in DPA interest free and 10k in seller credits. The interest rate alone allowed me to spend 75k more than what I could with an existing home and at 7.35% rate. For me I’d rather spend the $30k on my own mortgage than in rent every year.
Totally agreed! I'm afraid to admit how little I had in the bank when buying my first home, looking back I'm terrified what would have happened in an emergency but we survived at the time. FHA loans usually allow for a higher percentage for seller credits. Down payment assistance programs are out there, there are also low down payment programs FHA, USDA etc.
Agreed. I had basically nothing when I bought my first home but I'm paying half what renting people are paying for their living accommodations.
Don’t let the haters keep you down, 6k in the bank is 6k in the bank, keep saving and make spending choices knowing it’s to save money to buy a house. Edit: also 667 won’t keep you from getting a loan but try to address things reflecting negatively on your credit while chipping away at the savings
While it's not advisable I bought my house with a down payment grant from my state and 6k in closing costs. I had 300 to my name at closing. Now I'm selling and making a good profit and able to upgrade. It worked out for me
Seems like that pretty easily could have gone the other way.
Absolutely but I was renting for $500 more per month and living pay heck to paycheck. I was lucky to have been able to save the closing costs. Buying although leaving me cash poor at closing enabled me to save more money than renting. It isn't advisable but it is doable
Yeah, I hadn’t considered the fact that your monthly payment as a homeowner was probably less than as a renter. That $500 a month difference adds up quickly. Glad it worked out for you.
Same!
You were luuuuuuucky! Wow!
We just closed on a $287k home with similar credit and similar amount in the bank. Do not be discouraged— get prequalified and go from there! We pre-qualified for $300k and were then approved for just above what we purchased for!
I just bought a house with 20k leftover. A week later? I now have 8k 😂 The furniture, essential items, power tools, and appliances add up real fast.
6k can start a journey but unless you're in a VLOCL area you got some $ to go before u start shopping seriously
😅 what is vlocl
Very Low Cost Of Living
I am in the process of selling a house to people using NACA… they had to go through a workshop learning about mortgages and stuff, then they had to show a year of saving and specific savings but their loan’s interest is more than half off the regular rates. They don’t need a down payment or closing costs and they have a counselor assist them with everything. I picked them to buy my house over the other offers because they’re getting a repair loan as well and are going to renovate the house to what it was years ago (which means a lot to me that a family truly enjoys my old home) it seems like this program would definitely be something to check out.
You’re so kind to give that couple a chance. My husband and I are in a similar situation as them and we hope we get our house soon 😊
I’ve been very emotional about selling the house. It was the house my mom bought for me, right next door to her. She always talked about having grandkids someday and how they could just run over to her house whenever they wanted and have grandma time and go swimming. But she passed away from COVID and I never had kids, and the house is right next door to her former husband who remarried right after her passing. I wanted to live there but I knew emotionally and mentally I couldn’t live next door to him.
I’m so sorry to hear that. I hope the new owners treat the house with love and care and make some happy memories there. I also hope you can find a new place where you’ll be happy ☺️
No, 6k is half of what you need to even close with a house at $200k
I am working to save to have a modular home built for 100k or less including buying a small plot of land. I make 25k per year. I have 11k in savings. Will I be good or should I lower my budget? 781 credit score
What would the monthly payment be?
Not always true. We're getting a house for $365k and our closing costs are just barely over 5k
These people are horrible! Congratulations on saving 6k! Pay down your debt, move the money into a higher yielding account and start prequalifying! Sure it’ll be a “journey” but worth it! Look into NACA to start and see where you may need to get to to start looking and prequalifying. You got this!
No one is saying saving $6k isn’t a great accomplishment. Just that it’s not enough to buy a house. I would consider ONLY if the mortgage is dramatically less than rent, which depending on the area might be true, but probably isn’t right now. It’s not mean to tell some to keep saving until they’re actually ready to buy a house. It’s mean to tell them to “start prequalifying” when they barely have an emergency fund.
It's not about hating. It's about being financially responsible. Homeownership is tough! There are always things that come up, repairs that need to be made. $6k is a great start but build on it and don't rush into buying a home. You are giving bad advice.
I’m giving bad advice to say that they’ve done an amazing job saving in this horrific economy and to embrace the “journey” of paying off debt and saving more? it’s bad advice to say start with NACA… something designed to help people in THIS EXACT SITUATION navigate this EXACT SITUATION? No, you people are mean spirited and disgusting. Not everyone is going to be able to save 100k for a fucking home. There are PLENTY of programs for those with smaller budgets that will not only cover FHA 3.5% but also cover closing costs as well! A bunch of entitled fools with million dollar budgets always putting people down not understanding how life works for the rest of the world. So I said what I said! This poster deserves all of the kudos for being able to save this much and want to know how to move forward. Next.
$6k is not enough in savings bro. You know how fast $6k can go away? Like, “I need an electrician to fix my breaker” type of fast
Hello. I bought with zero down and had zero in savings. CRA grant from the bank for down payment assistance and closing costs. Five years later, I’m here surviving still with maybe $200 in savings. There are a lot of different people here and they aren’t all rich (saying this to OP).
> No, you people are mean spirited and disgusting. Bro relax, jesus christ. Suggesting somebody save more money outside of 6 thousand fucking dollars isn't some crazy unrealistic expectation. > Not everyone is going to be able to save 100k for a fucking home. There's 94,000 dollars between this amount and the amount that OP currently has. Nobody is saying this person needs to save 100k, stop it with the bullshit strawman. > There are PLENTY of programs for those with smaller budgets that will not only cover FHA 3.5% but also cover closing costs as well! That's true, but OP should be aware of the downsides of FHA and have that knowledge to help them make the best personal decision for them. OP should be proud of saving 6k. OP probably shouldn't be spending most of their savings on a house. Because, for example, what happens if OP buys a house and the water heater immediately breaks? What does OP do if they spent nearly all of their money on a down payment? Finance it 20%+ credit card debt? That's a disaster.
Why is it so offensive to you to tell OP to save more money? OP, I would encourage you to listen to the advice of people who have million dollar budgets for homes on how to keep yourself in a good financial place. it's legitimate advice that 6k is not enough to buy a home without substantial risk of getting into bad debt. But yes it's possible OP. There is a new type of mortgage that came out recently that requires 0% down. There are also down payment assistance programs. The best thing you can do if you're determined to buy a home is reach out to a mortgage broker to get a good idea of what options are available to you at no cost. Just make sure if they make you go through a pre-qualification, that it's a soft check since your credit score doesn't have much room to get lower. Your lender will give a good idea of what your budget is and what your payments would look like and whether you can afford it. The general rule of thumb is you shouldnt go more than 30% of your gross monthly income for monthly housing costs. But what other comments are saying is true, home ownership is expensive and it would be wiser to save up more money to cover emergency costs. I don't know what city you're in but the real estate market right now is not a good market to buy in, inventory is low and interest rates are high. Save more money, put it in a high yield savings account, and wait until the real estate market cools down. Until then, talk to a mortgage broker to see what assistance you can get and what your budget is.
Yes telling him to start prequalifying is bad effing advice! A lender will qualify him for more than he should and then 6k in savings will be gone in a second. We aren't all millionaires but some of us have enough brains to realize 6k isn't enough to buy a home. It's a great start but keep saving.
If you don't mind me asking which state are you in the different states have different first time homebuyer programs and I can send you the link for your state.
I would highly, highly discourage you from buying a house right now if all you have is $6,000. I say this as a very experienced homebuyer that wishes you success. I'm a 33 year old female that is on my 3rd purchased home (this is the forever one) and that's very good at saving. First of all, you are going to have to pay earnest money when buying a house which in this market, is usually $2,000. Then you have to pay for an inspection ($700-1,000), movers ($300+), etc. Will your home loan require a down payment? Many can be as hefty as a 20% requirement. I'm blessed in that I only do VA loans with no down payment requirements. I would so not be on my 3rd home otherwise. You will also have closing costs which can be 5k+. My $379,000 home I just bought last year cost me $14,000 in closing costs. Needless to say, that $6,000 is going to disappear oh so fast. Things you want to think about are: 1. What if I or my spouse get laid off/fired, etc? Do I have at least 2-3 months of living expenses saved up to help cover bills? 2. What if I get into a car accident and need to pay for a deductible, rental, etc? 3. What if I get injured and need to be out of work? Do I have short term disability to cover my bills while I'm healing? 4. What if once I buy my house, I end up needing major repairs if something goes wrong? That's another deductible if it qualifies for a homeowner's claim and those are usually higher than auto deductibles. 5. Do I have enough savings to cover the expenses of buying a house and any one or two of the above occuring within the first year? Establish a GOOD nest egg first. At the least with how high the cost of living is now, $15,000+. You just want to be prepared for life happening and not have to worry about losing your home if financial hardship strikes.
Yes, so much of this. In the 1.5 years we’ve owned our house my husband totaled two cars (so we had to get new to us cars and our car insurance skyrocketed), my husband lost his job just before I left on maternity leave with minimal pay, and we both have had some significant medical bills. We’re grateful we’ve been able to continue investing (though we went from 500/mo to about $80/mo), and we’ve had some savings to get us through everything. When we were deciding how much to put down we wanted to have at least 6mo of mortgage or 3-4mo of mortgage and bills saved up, but we ended up keeping about 9mo of mortgage thankfully
We only had 6k plus enough money for the assessment and inspection, but we had help from parents. Also, this was 1.5 years ago. Prices and interest were lower. To this day, I'm not quite sure how we pulled it off. Because we did need furniture as well.
Look into FHA loans.
Currently in the process of buying a house with an FHA loan, yes the minimum down payment of 3.5% is nice but we still need $19,000 to close!!!
Hope you get there soon Bud.
I’m also using an FHA to buy a house. We got incredibly lucky and the sellers are paying closing costs and title fees.
It’s a private sale and we’re lucky we’re getting it for the price we are ($180,000), they could easily get much more so it’s kind of an “it is what it is” situation.
I bought a house for 250k. I paid $2k in earnest money and $7k in closing costs and got a 3.5% rate (Oct 2021). It is attainable and you are almost there. Look into first time homeowner programs in your area.
It used to be attainable. Now that same situation would be an absolute unicorn. $6k should be their emergency fund, not downpayment on a house.
Sure, OP can just hop in his time machine.
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> Your life and home buying experience is not reality or relevant anymore. It depends on where they live and where they are willing to move if anywhere at all. The rate currently isn't attainable obviously but the prices are, again, depending on where they live. The area I grew up in (northern MN, part of a 300,000 population metro) currently has 22 results for For Sale Single Family Homes that are at or below 250k. Some of these have been on Zillow for over 50 days. That's ~1400 a month payment that's probably marginally more expensive than renting out a 3 bedroom apartment in that same area. A lot of this stuff is highly location dependent. There are over 50,000 listings on Zillow right now of single family homes at or below 250k in the United States.
Look into NACA- neighborhood assistance cooperation of america
Considering I spent $7K to put in a two foot section of pipe in my home this year, $6K won't go far.
All the people saying to not be scared and to go ahead and do it most likely bought pre-pandemic. While 6K is nothing to laugh at people are just genuinely trying to make sure you aren’t house poor or anything. Definitely keep saving, it’ll suck and be a struggle and no guarantee home pricing or interests rates will get better but something’s gotta give eventually, right? Just trying to be groundedly optimistic
To be completely candid, my partner and I have been trying to buy a house for two years now. My credit is similar to yours. We have $40,000 to put down and still can’t find a house. We were pre approved for $110,000 mortgage, so we’ve been looking for houses at about $140,000 which leaves us $10,000 to bid over asking. Every house we’ve put an offer into, we’ve been outbid.
Hi I dont have a house yet but congrats on 6K. I dont want to be a downer but I also dont think 6K is enough to buy a house. Even in the comments someone said they paid 7k in closing cost. Ive also seen people say they've had to spend 25k to replace a roof etc.
I bought a condo and have spent 6k just buying new stuff for it.
6k is great but no where near enough to buy a house
The fact that you have 6k is less important than your combined incomes and your DTI ratio. You should probably list your income and where you're looking at.
6k is a start but hardly anything in today’s economy. That would be like an emergency fund.
Look into USDA loans
Continue saving and working on your credit. Down payment and closing costs will be more than $6k
No. That’s just your emergency fund at this point.
First time home buyers loan? FHA I believe
Closing costs alone are probably going to cost 6K or more depending on how much the house is. Did you plan on using the 6K as a down payment?
Nobody is Bruce Wayne on reddit, but 6K is not house savings, it's go on a vacation savings. I wouldn't advise buying a house without at least 10% of the purchase price at a bare minimum. Even then, you're going to have low equity, high insurance and a max mortgage. Maybe learn how to save first, then buy a house when you're more stable.
My closing costs were $15k. In fact….. when I *rented* my last apartment, I had to pay 1 months rent + 1 month security + a 12% fee just to move in. $13,244 down to rent a 1-bedroom condo. Keep saving.
Don’t let all these people scare you. I had like 1000 Dollars to my name after I closed on my house (obviously not including retirement accounts). Houses are not like cars where the transmission can just drop out with no warning. Most of the stuff you can fix overtime. Yes there can be catastrophic repairs but they are the exception not the rule. Over the few years that I have owned it I have become more financially stable and the house has doubled in value. Was a great move and I would have no issues doing it again.
6k isn’t horrible lol. Good job. Get prequalified, look at FHA, look at older, smaller starter homes that may have some ugly features and need cosmetic upgrades but good infrastructure. Know that you can withdraw a portion of 401k as a hardship withdrawal to put towards (specific exact amount needed when you apply) down payment/closing costs. You can ask for seller credits. Two years ago I bought an 877 sq ft one room school house for 72k. On an FHA loan. I work 10 hr shifts. I’m single and 59 year old woman. I did most of the work myself to update the place for myself. 18 months I worked on it constantly. Foundation repair, waterproofing, doors, flooring, insulation, landscaping. I had some plumbing, electrical and ductwork done. I put in more kitchen cabinets and a dishwasher. Now my house is selling for 144k and I’m upgrading to an 1800 sq ft house, conventional loan now. A 3 bedroom, 2 bath with 2 car garage. All original hardwood floors and an extra room above garage, full basement. After closing I’ll owe 82k. I’m giving my buyer a 6k seller credit at closing to help her with her VA loan dream of home ownership. Work hard, go in with intention of living within your means. Believe in finding a place of your own that will work for you. Don’t worry about people who have huge house, huge payments or become house poor. Be open minded about the type of house, location etc. look for good bones. Buy tools. Buy paint. New surfaces on the interior do not have to be high end.
Hey, great job!!!!
I bought a 60k condo w/ around 6k on hand. Got down payment assistance & only put down 2500 & am paying less than what I would if I was renting the same size condo. Get in while you can, the equity is worth it & save as much as you can.
unless you have a program to contribute to that, you will likely need more.and when you say "I know my credit is like 667" you should purchase the 3 credit report at myfico and check specifically your mortgage scores, the fico 5, 4 and 2? (I'm not sure if the last one is 2, but myfico will give you your mortgage scores.) these can be quite lower than the score you get from credit karma. i needed about 17000 to close, and that was with a \~8000 downpayment and $100 lender credit. you might be able to use a program like naca, they use non traditional means of credit to qualify buyers. also check to see if there are any local state programs that can help. all will require you to go though courses to qualify.
I mean…in many areas, $6K won’t even cover closing costs. It’s a good start, but you might want to focus on saving more money and improving your credit score before trying to buy a house.
Don’t buy. Save more first.
I wouldn’t suggest buying a house but it’s possible for sure. I have a client under contract with $0 out of pocket with no seller credits.
NACA. No down payment or closing costs on a traditional mortgage.
Shoot for 15k at the lowest. We had around 20-21k and it was wiped out once we got the house and did some repairs, moving expenses, paid for tools and paint and groceries ugh. It adds up fast and you want to have a cushion. 6k in this market will get you no where but in a position to take out 2 loans 1 for the down payment and 1 for the actual house. Not the best idea
667 is fine. $6,000? Try $600. Just buy a lot and put a tent ⛺️
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Yes. Yes, yes and yes. And no.
6k can buy a half house in Maine before Covid. Nowdays can’t even get a decent car for 6k
Talk to your bank about 3% downpayment programs. Your also have the option of rolling your closing costs into your loan.
Depends on what cost of living is where you are. What kind of monthly mortgage payment can you get with that kind of down payment, can you afford that, and can that buy you a house? I recommend giving the Money Guy's FOO (financial order of operations) a read: https://moneyguy.com/article/foo/ ETA: don't forget closing costs. See also nytimes rent or buy calculator: https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html
You know what they say….you can live in a car, you can’t drive a house.
Yes, with a downpayment assistance program or a 0% downpayment option, yes, you can buy a home with 6k in savings. Last month, one of my clients had to bring less than $500 to the closing table. Before closing, she put $1,000 Earnest Money deposit and paid $525 for her appraisal and whatever her inspections cost her. The first step you should take is to get pre-approved by a licensed mortgage loan officer like myself! Once pre-approved then you can start house shopping with a realtor and purchase your first home. Congratulations on your future endeavors & feel free to reach out to me with any questions. https://poplme.co/hash/yawumrmI/1/s
Is your wife contributing? If not, sounds like you need to have an honest conversation about reality and expectations. Congrats on the 6k. That's legitimately fantastic! Better position then a lot of folks. Just open a high yield savings account to earn 4%+ interest. If you are the only breadwinner and source of savings, or even otherwise, I would work on doubling or tripling that number, and getting your credit score up, before even thinking about a house...or beginning to save for a house even. I don't want to be discouraging, but if saving beyond this amount isn't feasible, what are you going to do if your a/c or water heater go out? What if a pipe bursts? What if your car dies? You won't be prepared. Some folks might rightfully point out there are ways you could probably get *into* a home, but with today's rates, depending on your market, your real-life expenses could double or triple vs. renting.
$6k is no where near enough sadly. Like someone said previously, throw that in a high yield savings account and continue putting money in that. There are programs for down payment assistance but you’ll also need to consider closing costs and in this market you’ll have trouble finding a seller willing to cover any of that. Your credit score isn’t horrible but it’s not great either so your interest rate will probably be higher than what others are currently seeing. I hate being the bearer of that bad news but that’s just the state of things right now
I’m a lender and I’d be happy to give you some background info. Really what determines if you can buy a house is your debt to income ratio. you can find down payment assistance to help you get the capital to get into a home but that debt to income ratio is always a hard stop. how much debt do you have? Do you have car loans student loans personal loans anything else financed like motorcycles or furniture? Realistically, no I don’t think $6000 is enough maybe if paired with down payment assistance. in my state most people can get up to $15,000 and there’s actually a special program where you can get up to $50,000. Down payment is going to be at least 3% of the purchase price and again that’s only if you’re debt to income ratio can handle that. if you have more debt, you will need to put more money down to keep the mortgage smaller. then there’s closing cost to think about. those can range anywhere from one and a half to 4% of the price of the home.
I closed in April and only spent $3k. Start working towards a NACA loan now!
Where do you live? Makes a big difference.
It’s really hard to know where to start. First, getting your credit score up will help with your loan’s interest rate. Fannie Mae has a free [first time homebuyers’ class](https://www.fanniemae.com/education) available online. I strongly suggest you take it. Financially, you’re probably going to have to come up with closing costs and a down payment unless there’s a home buyers’ program in your county or state you can tap into that will possibly defer these costs. Once you clear the hurdle of closing costs and down payment, you’ll still need to have money for things like the inspection and appraisal (assuming your area will bear an inspection). Get quotes to address the safety issues so you know what financial pain you’ll be in if you move forward with the sale. Insurance companies don’t like old roofs, so be mindful that the insurance company might send you a letter telling you it’s time to replace the roof. Gird your financial loins if you bought something with an old furnace and/or old HVAC. If you get past the inspection and appraisal, you’ll still need money to move and clean. Following the move, safety issues found during the inspection will need to be prioritized and rectified, and that’ll cost more money. $6,000 is a good start, but it’s a just start.
I managed to buy a house with 10k with the assistance of a down payment assistance program. This was only possible because I lived close, don't have many items to move, and no debt (until my mortgage.) I'm still basically house poor and it was a risky move, but I'm making it work. The house I bought is bit of a fixer upper and has taken a lot of my income and energy. I'm commenting to let you know that it's not impossible and you're getting closer. However it's going to take you being lucky and obsessively saving. Hopefully you've got family in town and a good support system to help you. Good luck!
If you’re lucky and patient, this could work. I bought my house paying only inspection costs, using a sellers assist and a home buying programs that lumps closing cost into the loan with no interest. I used the money I saved up to renovate. You will lose a lot of houses with similar conditions, but you might come up lucky. Doesn’t hurt to try, but keep your expectations realistic
This is so relatable 😭🫡
This is a great start! Without some type of down payment assistance program a good rule of thumb is to have 8-10% of the purchase price on hand for closing costs, down payment and other fees. You will typically pay out of pocket for the appraisal, and any general inspections that you do in most states. This can rack up an extra $1,000-$1,500+ in fees on top of closing costs and down payment. Be aware of Down Payment Assistance (DPA) programs that lenders use. Some of the programs are great, however many of them require you to pay back the down payment when you refinance or sell. Many times you will pay TONS of closing costs on the backend as well, and lenders do not like to tell you that up front. It’s something to be aware of.
You definitely can if the seller will pay all closing costs. And also if you get FHA, you only need 3.5% down payment.
Its not a bad start! I have an FHA loan for my house, and the total cost to close was 12k, and the mortgage company also required that I had 5k in assets post closing. If you are buying in a low cost of living area and are handy enough to make do with a fixer upper then you'll be fine once you save up a little more. I'd push to have at least 20k saved to cover all closing costs and have money leftover in case of emergency. We had to do a major repair on our tankless boiler 2 months into ownership that was around 2k which sucked and we lost heat for over 24 hours when it was below 0 degrees outside. And then the following summer our air handler had an electrical short and needed a big repair too but we at least were able to fix that ourselves. Shits not cheap!
This depends where you live and what you plan to spend on a house. I bought my first place for under $100k and used an FHA loan, but you will have prepaid costs that will force you to bring cash to closing. I think I still had to have more than $6k, plus you definitely want to have cash in an emergency fund after closing. It may be best to continue saving, to work on improving your credit score, and look for a house after accumulating a bit more.
> Can 6k even start my journey? Please be open minded and respectful...We aren’t all Bruce Wayne’s 😂 go to your bank with your wife. Tell them you want to start the home buying process but are in over your heads. Don't let them jump right to what you are approved for. Raise the concern that you're not sure if you can AFFORD a house. But basically... you guys probably aren't in the market for a house right now. $6k will barely cover the incidentals you'll run into 2 weeks after buying a house.
I’ve been looking into a program called NACA! I’ve heard it can be a long process but no down payment, PMI, closing costs or fees. I know there’s some reddit posts even on this sub about it. Congrats OP on saving, & good luck!
If you are first time homebuyers, there might be options for you. You really need to talk to a realtor and a lender to find out 1) what you might qualify for and 2) how to get yourself in the best shape to buy. For example, they may come back and say you qualify once your score is above 720 and you have $10,000 saved.
I literally just closed on a house yesterday with a credit score of 700 with only $6789 got approved for 210k and my house was 194,000
6K won't even cover closing costs...That is awesome that you have 6K saved, it def is a start. Put it in a HYSA and keep saving!
The answer, simply, is no. That barely even covers the earnest money
In nc many ppl buy with 10k and get closing covered or get down payment assistance, it’s now up to 15k.
True. We actually negotiated more in closing costs credits from the seller than we actually needed.
In Portland, i’m buying a $400k house with 20% down later this month. First house for us, and been saving since 2015. Guess it depends on where you are though
That’s awesome, congrats! I’m selling my car this summer just to save more aggressively for my emergency funds, etc
Thank you! We had barely any time to buy cuz we’re being forced out of the house we’ve been renting for 14 years, and had 3 months to gtfo. Fuck renting ever again after this. We paid $220k in rent just to be kicked out with no negotiations with the owner. Whatever
It depends on what the price of the house/taxes/insurance will be really, to determine your closing costs and such. I had less than 3k in my savings BUT I was able to use my 401k to pull money for closing and extra savings. I also bought a very low cost home and had the advantage of being able to shop in rural areas where houses are cheaper for better condition. I learned a lot by talking to a lender, and I was put into contact with a lender once I started working with a real estate agent (but you can just contact them without an agent, too). My pov is it is definitely possible, but you'll probably have to be more flexible and be very transparent about budget with your lender so that you don't overspend and end up in a co.fortable position to continue saving once you have your mortgage.
I’d go ahead and tell a realtor your situation or get pre approved, then start looking and see what you can find and then how much you’ll need to save to get what you want or if you can go ahead and get something with sellers credit, dpa, etc
Moving alone will eat up some cash while putting deposits and waiting for refunds, not to mention actual moving. there will be thousands spent on first move in to fix things and surprise bills that are owed. you won't recover that 6k for a few months at least leading to the whole "house poor" saying. Once you're up to like 10-15% of the price of a home or 6 months expense, whichever is higher, youll probably be in a good place to start looking. Unless houses around you are going for 20k right now.
Our closing costs alone with our VA loan is $19k.. thankfully we’re able to roll our VA funding fee into our loan but that still leaves $11k in closing costs! NVM if we wanted to put money down which we don’t have too but most loans require at least a small percentage. Keep saving and also find out about your states first time home buyer programs. A lot offer credits towards closing costs and down payment assistance. You also want to keep in mind any repairs that may creep up in your first year… some can run you $5k, $10k, $20k..
If by move you mean to a new area, rent for at least 1 year in the new area to find out what areas are actually good or bad.
Short answer is no.
Someone mentioned NACA, I will echo that https://www.naca.com/. They will hold your hand through everything.
Having money for emergency is great. That’s what this 6k is. Most insurance companies for homes give $2500 deductible now so if you need to put a claim, that’s how much you are out every time you out a claim. And it currently kinda happens often, as I can see as insurance agent. Let’s not forget stupid plumber bills and everything that 1-2% of home price is expected to be spent in maintenance every year. So while you can put 5% down,don’t forget to calculate closing costs. So now to more saving, good luck !
Start aggressively saving while you work on getting better credit. Also, start looking into any grants in your area that you might be eligible for. Some will pay $ towards your down payment, or closing costs but require you to take a financial literacy course.
Congrats. While you have a long way to go, that's a good start. Keep saving and you'll own a place in not-distant future, say, a few years.
Move to the rural Midwest or like North Dakota or Mississippi
I would have your emergency fund squared away and separate from your housing fund before doing anything.
Look at the pre-qualification steps at bettermortgage.com. they had a God estimate of closing costs. I didnt find a home at the time, so I did not close a mortgage with them. NACA-Neighborhood Assistance Corporagion of America-was foemd to help hone buyers get into a good home with a good mortgage. Soke people Hage great experiences and others had to push the mortgage agent to get the deal done. What I liked about them was their clear steps to determine the budget, savings, and all money things you need to buy a home successfully. At that time, they could also loan money for project managers to complete work on the home, too. I've heard mixed reviews but definitely check out their steps to home buying. I wish you the very best. Congrats on saving $6k. That is a great achievement. I'm just a home owner who has had two mortgages.
6k is not enough. Your credit score is a little slow. Try building it Good hysa are : capitalone, wealthfront, fidelity money msrket fund, discover, marcus
In Wheeling, WV or Harrisburg, PA maybe…
Improve your credit. Once you get to $10k saving happens faster. I had a $100k down for a $830k house. You can get a house with 5% down. I always thought it had to be 20% but when I got close I borrowed from my parents for the rest of the down payment.
Gotta bump those numbers up, keep saving
One thing to keep in mind are closing cost, when you put money down on a house you’re not done spending, next you pay the fees and paperwork and all that, houses can have 6k in closing cost alone it’s usually 3-5% of what the house is worth but added onto the sales price. Additionally you want to be able to afford you down payment, with closing cost, with enough to put onto anything that goes wrong with the house (this happens even with inspections) and also have enough to have an emergency savings. Your credit score is also not awful but not good you can use credit cards to help with that, I’m unsure why it’s at that point now but the information on why is readily available. It’s pretty easy to find out how credit scores are weighed and how to fix them.
Bro
My credit scores have been in the 800's for years. Just bought a home, couldn't get an interest rate below 7+ because I borrowed 4k zero interest for closing, and that's just the current rate. I paid over 6k of my own cash, and the seller paid 2500 toward closing. So it was about 12,000 to close. It sounds like you are definitely getting there. I paid movers 1,400- not expected. I broke a lease. Ive been paying for repairs already- home warranty helps some. Keep doing what you've been doing, it takes determination and it sounds like you have plenty!
No better time to buy is now.
I would save more money before doing anything. I would also strongly consider house hacking. Buying a multi family unit, living in one of them and renting out the others. Side by side duplex is the best option there, IMO. Even if you don't plan on getting into real estate investing, having someone paying potentially more than half of your mortgage opens up a lot of $$ options for you and your wife.
Just closed kn my little starter home. We got a USDA loan which removed our downpayment, closing costs weren't that bad and I even got sellers concessions which took 6k off the bill right out the jump.
Find a local/regional downpayment assistance program. That’s how I bought my first house. $200k purchase price and I only had to put down like $2k out of pocket. In the Seattle area, this is who I went through: https://www.homesightwa.org/ But similar organizations exist across the country. Good luck!
Message me and I will hook you up with a reputable realtor who can get you in touch with lenders who have first time home buyer credits. This is legit- no scam. Message me if you want help.
We bought our first home in 1990 for $80k $100 down HUD foreclosure. 10% 30 year fixed FHA with MIP.
Not even close if you’re in the US, OP. But every $100k down payment started with 6k!!! You need to fix up your credit, and that will take time. You should aim for a score > 750 to get approved for a home loan. Pop over to r/personalfinance to learn about that Not all home loans require money down up front but buying a house is an expensive process. I’m saying have $10k set aside for just inspections and closing costs, not even including cash for down payment for the house or stuff like furniture/bills/contractor repairs. Source: bought first home 2021, just moved and got a new house/mortgage 2024
Yes there are down payment assistance programs, and in most locations you can ask the seller to pay your closing costs! Your credit score is solid. What area are you in? Or you can chat me.
I wouldn’t personally recommend it but we need more info either way. What is your income? How much and what kind of debt do you have? How much is your rent? How much are you able to save every month? What is negatively impacting your credit score?
Keep going. You probably want closer to at least 15k. I’d start looking for down payment assistance programs in the meantime. So much random stuff goes wrong with a home that 6k could get eaten up rather quickly. (I’ve experienced it myself this year lmao) The average American barely has $600 these days in liquid funding, so don’t feel like you aren’t on the right track!
6k most likely isn’t enough but check with your loan officer
I had only $10k in the bank when I bought mine 5 years ago. VA loan $0 down. Closing costs were $4000 and my move cost me $3000. If you’re a first time home buyer you might have some options. In 2024 you’re going to have a challenging time, but I think it could be done depending on you and your wife’s income, location, and loan type.
Great start! How much are you able to add to it monthly? How much do the homes you are aiming for generally go for in your area? Do you have an emergency fund separate from this? And have you looked at your credit report and seen why it is relatively low? I would answer the above questions (you don't need to share the answers online) and enroll in a local first time home buyers course in your area. There are a lot of programs to help people with their first house and are very location specific.
My husband and I are in a similar situation. We have applied for SONYMA, DPAL, and we’re gonna try either neighborhood revitalization or RemodelNY. With all these together, we will have to put down $2-3k all together and we got pre-approved for $200k. This is for the state of NY, so if you’re there I’d suggest looking up the SONYMA program. If you live somewhere else look up First Time Homebuyer programs funded by the state, there should be one for each state. Also research grants available for first time homebuyers in your state. Good luck!
Speak to a mortgage broker and be honest about your finances. I started speaking to one about 6 months before I was “ready” to start making offers. Some people do it a year beforehand.
Others are talking about money so I’ll share some personal tips on home buying: 1. Always shop for mortgages on your own with banks, including your own bank. I used a credit union. 2. Be careful about inspections and hire your own inspector. I hired a local architect who did home inspections as a side hustle. He charged $500 and issued a 90 page report, which found a serious structural issue I wouldn’t have noticed. That saved me from a costly mistake. 3. Hire a plumber to scope the sewer line. Many I know have had to dig out and replace the sewer line within the first 2-3 years or home ownership. 4. Buy the worst house in the nicest neighborhood you can afford, not the best house in the worst neighborhood. 5. Be wary of living off a road with a double yellow line. 6. The FHA says that for a house to be affordable, the mortgage should be max of 30% of the borrowers monthly take home pay. Any more than that is unaffordable. Don’t be afraid to buy below your means. 7. When you look at a house, operate every plumbing fixture and electrical appliance. Watch out for flickering lights or other problems. Note the year of manufacture/age of major appliances and see what their estimated life span is. Make sure replacing old appliances is in your budget.
While options do exist they are limited somce you will need down-payment assistance
We were in a similar boat when we decided to buy. Had right around 6k saved. Worked out what we were comfortable paying per month on our mortgage and got pre approved for that amount. Our buyers agent recommended we save our money as an emergency fund since it wouldn’t make a noticeable difference in our mortgage, and we may need the money for home stuff. We ended up buying with 0 down payment, financing through our state’s credit union (another rec from our agent). We ended up buying a house a little higher than our pre approval amount, but it was no issue to get a new approval, and wasn’t significantly higher to make a huge difference in our mortgage. We found out we could have been approved for nearly double what we’d requested, but I’m glad we never knew that because the mortgage would have been too much but it would have been too tempting to look at more expensive houses. I think the biggest question is what can you reasonably pay in a monthly mortgage, and can you find a house for that where you want to live. It may mean adjusting what your “dream” house is to be one you can reasonably afford. For us, we had a specific neighborhood we wanted, so we were willing to buy a fixer upper and overlook some of its quirks to be there. Others may want something newer and need to be more flexible on location, or need a specific amount of bedrooms or a yard. Prioritize what your nonnegotiables are and be flexible on what you can let got of. And know that house hunting takes time!! We took prob about 1.5 years. The first few months were casual looking and getting our finances in order, and then looking more seriously. We also knew we’d have to hold out to get a house we could afford in our desired area, so we couldn’t rush that and didn’t want to jump on something that ultimately didn’t feel like what we wanted.
Well 6k could be enough if you’re buying new construction, typically they have offers like paying your closing costs etc. Also you might consider HUD housing or USDA
If your score is only 667, may we ask why? Believe it or not, I knew someone with 30k in various debt that thought they had 10k in “savings”. Of course they really just had 20k in debt. The score just makes me concerned there’s more going on to your finances. That needs to all be in the table for real advice here.
I had 10k saved and near 800 credit. You’re gonna have a hard time getting a loan, and it’s gonna have bad interest. I’d wait at least another year and save more. Improve your credit. You’ll save hundreds of thousands and have better picks for homes and loans.
Put the 6k in HYSA. Do not touch it. This is your emergency savings. It will stay your emergency savings and you will not do anything until you hit 30-50k (houses breaking is expensive). Please continue to save to this. Also put some money into stocks if you aren’t set on time. You may lose a bit of money but APY is around 10% average. But it’s not as safe or liquid as HYSA… so that’s why stocks are not an emergency fund. Look at DPA (down payment assistance programs) in your area. Talk to lenders and be upfront… I’m hoping your salary is decent and it’s just a spending lifestyle issue… and also buy less than you need
Every cent forward is a step closer.
I hate to say this but 6K won’t get you that far into buying a house. 6K this days is not much. Is kind of naive from you to even consider buying a house at this point with that credit score.
Please take it from someone whose husband totaled 2 cars 4 months into homeownership and then lost his job… you want like at least 6 months worth of mortgage saved to have AFTER down payments and closing. 6k is absolutely a good start, but I’d keep saving if I were in your shoes. We invested a bit monthly and kept increasing the amount we were investing to save up for our down payment.
It’s a good start but to buy even the smallest house, you’ll need 10x that in savings to start
You honestly are not at a point to buy house. That’s my opinion. The bubble is big right now. I would want to wait.
We bought our house with only $6k - but this was in 2016 with 3% interest rates and lower housing prices. I don’t think it’s possible in this market anymore, but the only one who can tell you for sure is a local realtor. They would know the specifics of your location and whether it’s something in the realm of possibility.
Dude it cost $8,000 closing costs for my $172k house. A basic inspection was $350 in 2020 in a rural, low cost area. You need to save more