How did you save for your down payment for your home?

[Meadbh]

Bought in 1991 having saved for a downpayment for the previous 10 years. Put down 70% (yes, ladies and gentlemen), got a 6 month closed mortgage at 10%, paid some more down at the end of that term, got a 1 year closed at 8%, paid it all off 18 months after moving in.

Am now considering a move to a location with high property costs. Went to a presentation centre just for fun today. "We have two bedroom condos at $857K, one bedroom condos at $534K, and three bedroom penthouses at $1.2 milliion."

EEEk!



Welcome to Canada.

 

[Moemg]

Bought my first home in 1971 for $26,000 . We put down $5,000. We later sold that house for $110,000 . I rolled my profit into my second house and in 1995 I bought my third house for cash .

 

[cute fuzzy bunny]

It was 37 years ago, and I don't have a clue how we made the down payment. But I do remember the price: $7,500. 30 year FHA loan, payments were $75 a month.

Yeah but what were you making? $200/mo?

My dad loves to tell the same stories about how everything cost a penny when he was a kid. I have to keep reminding him that you had to work all day for a penny then, and by the next morning it was worth 10% less...

I made my first down payment the old fashioned way. I sold a business and paid cash for the house.

 

[REWahoo]

Yeah but what were you making? $200/mo?

Hell no! I was making $325.

 

[cute fuzzy bunny]

All in ones, right?

 

[Achiever51]

First house: in 1977, bought for $42,000 -- assumed the previous owner's mortgage (I don't think anyone does that anymore!). Payments were $270/month. Down payment of $10,000 was a combination of savings and $3,000 no interest loan from my parents. [House was in a great neighborhood, but was a disaster inside. Every door was broken and nearly every wall had a fist hole in it -- previous owner had a son with "anger management" issues! The house went unsold for nine months before we saw it; other homes in the neighborhood were selling on average in two weeks or so. Worked our butts off to completely redo inside and sold it eight years later for $120,000.]
Other houses since then we've rolled over the profit as the down payment.

 

[WM]

We bought our first house in So Cal in 2001 for $260K with 20% down. It's a small place in a nice neighborhood and needed a lot of cosmetic work. We saved up for the downpayment by living cheaply prior to that. My parents also loaned us 15K (paid back after a few years) that gave us some extra confidence about putting all our cash into the house. We could have done it without their help, but we would have worried more.

We're renting that place out now and we've moved to CO (it's nice! you'll like it! ). On this house (170K), we put down only 5% because the rates were still decent and with USAA we didn't have PMI.

 

[honobob]

Hell no! I was making $325.

Waittaminnit! 1968, in school, totally not legal age, working as a professional janitor for Holiday Inns in Cincinnati 11pm to 7am. Hey, teach me something and I'll stay awake! Paid $1.75 an HOUR!!! equals $303 a month!! What were you? A nooculeer scientiest? Minimum was $1.00 and got all my buddies on board.

 

[honobob]

First house: in 1977, bought for $42,000 -- Worked our butts off to completely redo inside and sold it eight years later for $120,000.]
Other houses since then we've rolled over the profit as the down payment.

WOW! Figuring you spent no more that 25% of your purchase price for interior repairs you had 11% annual compounded appreciation in the 80's in Michigan!!!

4% Appreciation my *ss

 

[cute fuzzy bunny]

Hey Bob...any chance you might find yourself a SECOND note? :

 

[aenlighten]

Long and hard

I had roommates and saved much of my income for a long time and I really doubted I ever would be able to buy, but by age 33 I had amassed 25% down to qualify at a 36% debt to income ratio. I had no other debt, and it was the only way I could qualify by myself. Since the returns on my down payment had been so heavily taxed, within a year my tax adjusted mortgage payment on a 3 bed/2 bath was the same as rent on a 2 bed apt. Quite an easy transition, and when rates dropped a few years later, a refinance made it even cheaper. I paid it off 12 years later after I retired. I have made almost as much on it as on my investments. I am now a captive though since taxes would eat me alive if I moved. I am satisfied with it though.

 

[SteveR]

We rented for 3 years before we bought our first house. That was in 1977. As I recall the price was around $35,000. We paid 10% and paid PMI. I am still amazed we even found that much in the sofa to make a down payment at all. DW was not what you call a "saver" so saving was a distant dream.

We moved after a couple of years to a different state and the only house we could find was $50,000. We barely had enough for a down payment after selling the first house. We stayed there for 4 years and I moved out of the country for 3 years. We rented house #2 while we were renting a house in the other country.

After 3 years, we moved back to the states and sold house #2 and bought house #3 for $115,000. We moved two years later in the trough of real estate prices in our area and lost all our equity over the prior 10 years.

We moved to another state and rented for a year while we saved some $ and ultimately borrowed more than half of a down payment on house #4. We lived there for 3 years until we divorced. The house was sold and she took the gain on the house and bought a condo. I rented with an option to buy in a fixer upper. I bought the house (#5) after a year. Lived there for another year and then moved. Sold #5 and rented in new location for a while. Remarried and together we combined our previous equities and bought house #6. We lived there for 9 years. Moved to another state and sold #6 and some land we had purchased with the intent of building. Made a bit on the land and the house and bought house #7 with a 60% downpayment. I have lived here 5 years and the house is now up 40%.

We also bought a cabin (house # eight) in the mountains near here in 2002. Sold it in 2007 and made enough to remodel the house and buy a large chunk of a RV and put some in a MM for expenses.

We will be selling house #7 this year and will buy house #9. We will most likely sell it and buy something smaller in a few years. Who knows after that. We expect to have little or no mortgage on house # 9 and none from there on.

 

[Ronstar]

I bought a vacant lot in 1977 for 13k - borrowed 10k. Paid it off in 1981, sold it and saved a little more to buy 5 acre lot for 20k in 1983. Built first house for 60k on the 20k lot in 1984. Also built detached garage. Saved 84k and bought 2nd 5 acre lot in 1993. Took out construction loan and started building on 2nd 5 acre lot in 1994. Sold first house in 1995 for 185k (135k in equity). Applied the 135k in equity to the 2nd house and ended up with a 115k mortgage.

 

[Walt34]

First house with 1st wife was $78K in 1979, I think 5% down with PMI, interest rate was 11 7/8%, money saved by living in an apartment on one income and saving the other - both of us made the same income. Sold that one during the divorce for $91K in 1984, when the dust settled I ended up with $7.4K, some furniture, my clothes and a 1970 Plymouth Duster. Moved back in with Mom, banked all I could for 18 months and bought another house in late '85 for $94K, again 5% down with PMI, interest rate 11.5%. Foolishly, I had also bought a new '85 Chevy pickup truck with a $315/month payment for 3 years. Those were lean times, but I worked overtime often and that paid for little luxuries like radio control airplane stuff. Brown-bagged lunch and ate a lot of spaghetti. Also had no employment-related expenses since the employer issued a car and all equipment. The house had almost no furniture in it for about 4 years but at the time I didn't care. I just wanted my own place, I figured the rest would come with time and it did. Very often a "date" with very understanding and patient 2nd-wife-to-be (didn't know it then) was renting a movie, spaghetti, bottle of wine and a fire in the fireplace.

Refinanced a couple of times as interest rates dropped and had it paid off in 14 years by paying extra on principal when able later on. That was a high-dollar area by then, sold it at retirement for $280K in 2002, (they're going for $500K now, aarrgghh!) moved to a less-congested area, wrote a check for the current house and two new vehicles to replace the 14 and 18 year old ones we had, both of which were falling apart.

 

[saluki9]

I'll be totally honest. We had saved enough on our own but both of our parents kicked in on both of our houses without us asking.

Thanks Mom and Dad.

 

[Caroline]

I lived in the city and my parents lived 40 miles away in a more affordable town. I saved and saved and bought a house near my parents since I traveled to see them every few weeks anyway. Paid 20% down. Rented the house out and kept my room in a shared house. Saved some more. Put 20% down on a second house for myself, again, in my parents' town.

Sold house #1 for tidy profit last year. Will take that and plan to put 20% or more down on a house I want -- back in the city -- in the next couple of years as prices deflate / flatten. Debating whether to sell house #2 at that time or rent it out and wait 5-10 years for a decent market.

This was a convoluted way to go about affording a house in a high-rent area, but as a single-income, high-tech (read "high-risk") worker, it allowed me to take on a reasonable debt, spread my risk, and sleep at night.

Keeping my job through the tech bubble was sheer dumb luck -- it could easily have gone the other way, and I built the worst-case scenario into my plans.

 

[Nords]

Two years of renting up & down I-95 between Ballston Spa & Orlando.

VA loan in my first submarine homeport (Charleston, SC) on a 2BR 2BA condo in 1984. (Anyone know if Mt. Pleasant's Village Creek condos are still a decent place to live?) Paid about $50K, held it for three years, lost money.

Saved lots of sub pay and couldn't spend it during sea duty. When I was out on 90-day patrols I used to have a realtor (submarine spouse) rent my (furnished) place out to other junior officers during their househunting trips.

Used every nickel we newlyweds had for the down payment on a 2BR 2.5BA condo ("The Glen") in Pacific Grove, CA in 1987. Bought at $185K with about 15% down and paid PMI on a variable-rate loan for over two years. Sold for $215K and used every penny of our profits to buy a 4BR 2BA Oahu fixer-upper which we rent out today.

We put a lot of sweat equity into our homes but the market timing and military housing allowances sure helped.

 

[Gumby]

I rented until I was 34 and the young wife and I had been married for 9 years. Our down payment came from savings over that time. For the first 8 years we owned the house, we rented out an attached in-law apartment to help us make the mortgage payments. (The apartment has since been incorporated into the house).

The 150 year old house has required substantial work over the years, as it was originally purchased, in a sadly neglected state, by a flipper who put in minimal, cheaply done cosmetic stuff (like cheap wall to wall carpet instead of refinishing the hardwood floors, cheap vinyl wallpaper over cracked plaster walls and acoustic ceiling tile over cracked plaster ceilings. But that's what made it cheap enough to buy in the first place.

We have refinanced 3 times to take advantage of lower rates and to bring in the term. We never took any money out. Today, we have at least 85% equity in the house and the only reason we don't pay off the mortgage is that it is only 5% money and I'd rather invest in something else.

 

[Marquette]

Decided we wanted a house... saved 5% over a year. Bought in 2001 after the slump. Builder did $15k in concessions... used that to put another 5% on the house and cover closing costs. Paid extra as fast as possible to eliminate PMI.

So, 10% down.

In retrospect, I wish we had stayed out of the market.

 

[kombat]

We put 10% down, borrowing most of it from our RRSPs under the RRSP Home Buyer's Plan (HBP).

 

[bpp3]

Saved up cash for the downpayment in the bank, setting aside the cash at a rate equal to an estimate of what the mortgage payments would be, in order to get a feel in advance for how manageable the mortgage really would be.

 

[bright eyed]

This is incredibly helpful - thanks for sharing...I don't feel totally out of it...seems at least 10% will be doable in about 3 years or so and if the prices keep falling/level out we're in even better shape...

 

[al_bundy]

lived with parents after getting out of the army and saved some money

wanted to move out at one time and had my mom yell at me and call me stupid for wanting to waste money on rent rather than save for a place of my own

 

[Razor]

lived with parents after getting out of the army and saved some money

wanted to move out at one time and had my mom yell at me and call me stupid for wanting to waste money on rent rather than save for a place of my own

Mothers do know best.

 

[Robert the Red]

We saved up about 30% for a down payment on the first house. But we're pretty conservative / frugal / cheap. Especially my wife, about some things.

Vacations, on the other hand -- just bought $3000 worth of air tickets for our trip to Tibet!