20% downpayment on a new house

[l337]

To the OP..

CASH is king in this economy. Ask any expert. The more cash you have on hand the better protected you are from incidentals, miscellaneous and anything else that comes up. You cannot readily get CASH out of your house.

For me, it comes down to this. If I know I can and I know I will save 'x' amount of cash over a period of time, I might blow my savings and do a DP of 20%. Only if however, it means that I can guarantee that in the short term I won't have a cash flow problem.

 

[Kiohtee]

LOL, NO!

Not everyone has to have a fancy 1-2 bedroom apartment that's gated, along side a $300+ car payment. That combined could eat up $1500-2000 a month.

I live with roommates, and my rent is $500 all inclusive. I don't have a car payment either. So while I know two personal friends who's rent + car is close to 2K, I'm sitting at $500. If I saved that $1500 a month, that's 18K in a year. I didn't save exactly that last year, but I did damn well.

And not everyone has a vehicle that's paid for and lives with other people. :shrug:

I know I'll never live with friends like that, much less complete strangers. No thanks.

 

[Kevins89notch]

And not everyone has a vehicle that's paid for and lives with other people. :shrug:

I know I'll never live with friends like that, much less complete strangers. No thanks.

It's a to each their own. My friend agrees with you, and pays about $1600 a month for his apt and car. That's more than half his income. He says he's sick of renting, and wants a house. That $1,600 is the new rate as he just moved to a cheaper apt. A year from now he won't have any more saved than he currently does. What I'm getting at is that some of the people who say 20% down isn't possible, just don't want to make the necessary sacrifices to do so.

It's like a member at another forum. He is in his early 20's, has a foxbody, and was looking at a brand new 2014 daily driver. People told him he should save his money and get a house. However he felt he deserved the new car, so he got it. In 2 years he'll be bitching about how 20% just isn't doable either.

 

[Kiohtee]

It's a to each their own. My friend agrees with you, and pays about $1600 a month for his apt and car. That's more than half his income. He says he's sick of renting, and wants a house. That $1,600 is the new rate as he just moved to a cheaper apt. A year from now he won't have any more saved than he currently does. What I'm getting at is that some of the people who say 20% down isn't possible, just don't want to make the necessary sacrifices to do so.

It's like a member at another forum. He is in his early 20's, has a foxbody, and was looking at a brand new 2014 daily driver. People told him he should save his money and get a house. However he felt he deserved the new car, so he got it. In 2 years he'll be bitching about how 20% just isn't doable either.

But I don't work to live with roommates. It's not about not wanting to do whatever makes it necessary to have a 20% down payment, it's that it isn't practical. And to most people it's just not. I don't work to have shitty cars nor do I work to never have any niceties.

In order to make having a 20% down payment possible within the next five years or so I'd have to give up pretty much everything that makes life worth living. I'd have to give up living on my own with just my wife, our new car, probably some of the extras we work so hard for, etc. I don't think so! I'd rather just pay more per month and still have a decent savings (although nowhere near $20K).

 

[mc01svt]

LOL, NO!

Not everyone has to have a fancy 1-2 bedroom apartment that's gated, along side a $300+ car payment. That combined could eat up $1500-2000 a month.

I live with roommates, and my rent is $500 all inclusive. I don't have a car payment either. So while I know two personal friends who's rent + car is close to 2K, I'm sitting at $500. If I saved that $1500 a month, that's 18K in a year. I didn't save exactly that last year, but I did damn well.

some people have to move to other states to start their careers. They may not know a single soul or have any friends or family in that area. So getting a roommate is out of the question. :bored:

 

[Kevins89notch]

some people have to move to other states to start their careers. They may not know a single soul or have any friends or family in that area. So getting a roommate is out of the question. :bored:

Um, no. You find a place, meet up with the other person to check it out and get a feel for the person. You either then move in, out keep looking. I've done it a handful of times. Again, I'm not saying it's for everyone, but to say it's not an option is wrong.

 

[Kiohtee]

You do whatever you feel you comfortable with doing, but don't point fingers and say someone isn't willing to do what's necessary because they won't move in with what's, more or less, complete strangers. Or because they won't give up the things they work so hard for. Sorry, but it's not worth losing everything I've worked for just to save a few hundred dollars a month in PMI for a larger down payment. You've lost much more in just surrendering everything you had.

And I personally wouldn't feel safe knowing my roof depends on the work ethic of others and their company's financial stability.

 

[nickf2005]

It's a to each their own. My friend agrees with you, and pays about $1600 a month for his apt and car. That's more than half his income. He says he's sick of renting, and wants a house. That $1,600 is the new rate as he just moved to a cheaper apt. A year from now he won't have any more saved than he currently does. What I'm getting at is that some of the people who say 20% down isn't possible, just don't want to make the necessary sacrifices to do so.

It's like a member at another forum. He is in his early 20's, has a foxbody, and was looking at a brand new 2014 daily driver. People told him he should save his money and get a house. However he felt he deserved the new car, so he got it. In 2 years he'll be bitching about how 20% just isn't doable either.

But I don't work to live with roommates. It's not about not wanting to do whatever makes it necessary to have a 20% down payment, it's that it isn't practical. And to most people it's just not. I don't work to have shitty cars nor do I work to never have any niceties.

In order to make having a 20% down payment possible within the next five years or so I'd have to give up pretty much everything that makes life worth living. I'd have to give up living on my own with just my wife, our new car, probably some of the extras we work so hard for, etc. I don't think so! I'd rather just pay more per month and still have a decent savings (although nowhere near $20K).

Get rid of a new car payment and you could have an extra $6000 a year. That's on top of what you were already putting in savings (if any).

It's all about priorities. If you want a new car and a new house, you're going to be paying more interest and PMI. That's money you could have in your pocket down the road. I understand that not all go about it that way and that's their choice.

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[Kiohtee]

Have you gone daft? Getting rid of our new car wouldn't save $6,000 a year, not even close! :lol: And I get that we'll be paying more in interest and PMI, but have I not been saying that all along? :shrug:

Nobody has yet to answer me this... How is practical to just give up all the niceties and the power living on your own has if that's what you gotta do for a larger down payment? If it works for you then awesome, but that's not something I'm about to do. And that doesn't mean that it is possible for everyone to do, because it's not.

 

[nickf2005]

Have you gone daft? Getting rid of our new car wouldn't save $6,000 a year, not even close!

And I get that we'll be paying more in interest and PMI, but have I not been saying that all along?

Nobody has yet to answer me this... How is practical to just give up all the niceties and the power living on your own has if that's what you gotta do for a larger down payment? If it works for you then awesome, but that's not something I'm about to do. And that doesn't mean that it is possible for everyone to do, because it's not.

I was just basing it off a $500 car payment. Maybe I am off the average new car payment.

Yes, you have said that. I agree and just stated that it is a priority thing. If saving the money on added interest and PMI is less valuable than living on your own in a house that you own, then so be it. Part of the housing crash was due to people having little equity in their house, then the market tanked and everyone was upside down.

I've been there myself and won't do it again. I lived in a house for 3 years (10% down?) and barely broke even on the sale. Add in all the money i out into it and in that instance, I should have just rented.

I think it is very practical to live with somebody else, even if you're married, to save some money and push for the bigger down payment if money is tight(er). My buddy is currently doing it... Has been for 2.5 years. Saved them a ton of money.

Posted via Topify using Android

 

[lowflyn]

I was just basing it off a $500 car payment. Maybe I am off the average new car payment.

Yes, you have said that. I agree and just stated that it is a priority thing. If saving the money on added interest and PMI is less valuable than living on your own in a house that you own, then so be it. Part of the housing crash was due to people having little equity in their house, then the market tanked and everyone was upside down.

I've been there myself and won't do it again. I lived in a house for 3 years (10% down?) and barely broke even on the sale. Add in all the money i out into it and in that instance, I should have just rented.

I think it is very practical to live with somebody else, even if you're married, to save some money and push for the bigger down payment if money is tight(er). My buddy is currently doing it... Has been for 2.5 years. Saved them a ton of money.

Posted via Topify using Android

You have to remember people are financing cars for 6-7 years now...

 

[Kiohtee]

You have to remember people are financing cars for 6-7 years now...

What does that have to do with anything again? $500 per month is $500 per month. He never mentioned the total cost of the car, only a monthly payment.

 

[RDJ]

I was just basing it off a $500 car payment. Maybe I am off the average new car payment.

done' know where you got the 500 bucks from but I think that is way to high for an average car payment. if I were to get rid of my new car I would save half that.

in addition as he said later people are financing new cars for 6 and 7 years now. which will drop the payment considerably from even my 250 bucks.

it is a good idea? maybe, maybe not depending on the circumstances and reasoning behind it. I tend to finance a car for as long a possible to get the payment down as low as possible and pay it off early. that way if the shit hits the fan I can still afford (most likely) to make the payment.

Yes, you have said that. I agree and just stated that it is a priority thing. If saving the money on added interest and PMI is less valuable than living on your own in a house that you own, then so be it. Part of the housing crash was due to people having little equity in their house, then the market tanked and everyone was upside down. .

people not having equity in their homes had very little to do with the housing crash. idiots buying more house than they could afford TODAY while banking on pay raises, and housing value increases down the road that failed to materialize is what caused it. Lack of equity was not the problem.

as has been said (an apparently ignored by many) sometimes the added interest and PMI is LESS that what it would be by waiting to buy. if you wait to buy and interest rates go UP and housing costs go UP you are going to pay more in interest than you would had you purchased the house earlier and paid PMI for a few years. PLUS you have to add the cost of rent pissed down the drain while you save that extra down payment. and the equity lost, and the rise in home value that you missed by waiting.

I've been there myself and won't do it again. I lived in a house for 3 years (10% down?) and barely broke even on the sale. Add in all the money i out into it and in that instance, I should have just rented..

this probably had more to do with you only living in it 3 years than anything. and you more than broke even if you count the interest and taxes paid deductions you took for that 3 years. not by much but more than you are giving credit for

I think it is very practical to live with somebody else, even if you're married, to save some money and push for the bigger down payment if money is tight(er). My buddy is currently doing it... Has been for 2.5 years. Saved them a ton of money...

I think a married couple sharing a place is not practical. that is good for singles and I have certainly done it. but it is not for everyone and not practical for everyone. if you can do it as a married couple great but I would only do it under some very very very limited circumstance. even as a single person it is not always practical.

 

[Brutal Metal]

Says the man with a modded 99 Cobra. :lol:

^^THIS coming from a guy with a 89 LX? I had one of those 23 years ago