Perhaps there’s a broader question here? How did posters accumulate the downpayment for their first home, and how long did that take? And do they expect their kids to do the same (I know a lot of people here have suggested that they have already or will gift money to their kids to help out)?
I’ll start: We bought a house right after getting married, at a time when we had essentially no savings. But we only needed a 10% downpayment and that was about 20% of my annual income at the time, so a pretty small amount. We borrowed the money (unofficially) from family and paid it back over the following year (mostly with my end of year bonus).
We scraped together 10% downpayment for our first house. We had been married for 5 years. And I mean scraped. We had about $10 left in our bank accounts the day of our house closing. DH had JUST completed his bachelors degree and I was a public school employee making about $15,000 a year. Interest rates on mortgages were 12%.
BUT we had zero dollars in debt. I think that’s how we got the mortgage!
DS had a dedicated savings for purchasing a place. He had 10% easily, with some extra for expenses after purchase. We decided to gift him the additional 10% to avoid PMI. He actually didn’t want it…but we insisted.
DD and husband have a dedicated savings for an eventual home purchase. This is in addition to their emergency fund. They put money in this account monthly.
Purchased a townhome 15 months after graduation. Needed 5% down. After graduation I moved in with my future in-laws and slept in their basement on a pullout couch with my future wife in her own bedroom. We saved like crazy from our first adult jobs. Had to pay for a wedding, purchase a place to live, and furniture. Fun times. Still remember the initial interest rate of 7.25%.
My first house cost $150k. It wasn’t that hard to save up the 10% down payment.
2nd house cost $250k, my parents loaned us $25k for the down payment for it (a large chunk of which they later forgave).
RE prices in MA have gone insane. That $250k house would now be close to $1 mil. It’s very hard for young families, even with two incomes, to save up the money needed for a decent down payment.
So when we sold the 2nd house, we set aside $100k for each kid to use when they buy a house. DS just took advantage of that to buy a house that should be adequate for his family for the next 20 years. Since they didn’t have to funnel every dime from selling their first house into the new house, they will be able to do some needed renovations.
We figure, the money is far more use to them now than it would be in 20-30 years when we are gone. They will likely be getting a pretty big pile then as well. Neither kid is irresponsible with money.
Our first house cost $100K and we put down $40K and got the rest in a 14% mortgage (a great rate at that time - 1984). We used savings we had put together through our few years of working. We both still put the max company match into our 401K plans from our companies (like 6% at the time), so we saved for the house outside of our retirement savings. Signed the contract on the house and then planned a wedding (which ended up being a few weeks after the closing).
My daughter is very frugal and has enough saved for a down payment on a decent house. (And she always contributes the max company match to her 401K and 403 plans). However, at this time she is not planning on buying anything - she likes her apartment in the city. Our recent horrible experience selling our home, has further tainted her from wanting to be a homeowner.
Well, I probably won’t be much help. I got my down payment from a severance package from a corporate layoff. That gave us the 5% we needed to get our first house…after I found another job, of course
We bought my husband’s parent’s house in 1997, when they moved to a senior community. We paid $170,000, they could e gotten $180,000 based on comps, but they did leave us a full attic, basement and refrigerator and we helped them move (had a 1 year old and I was pregnant). My parents gave us $10,000, I was a full time grad student. I think we only paid pmi for a year. I honestly don’t know how our kids will buy homes, one lives alone and pays $2000 a month for 350 square feet, the other pays over $1000 a month for a bedroom. Starter homes are $500,000.
We saved my entire salary for 1 1/2 years and used that for the downpayment for our first house ($140K). We borrowed $5K from my parents when we had to unexpectedly relocate for my H’s job but repaid them a month later.
My D already has enough saved for a first house downpayment (she squirreled away her entire co-op and internship salary and she’s a saver by nature. She’s waiting until she’s done with her rotational program and can put down roots somewhere before buying. She’s likely going to be in a low cost of living area and won’t need any help from us. I can see gifting her some big ticket items as a housewarming gift.
We bought our house thirty years ago with 20% down payment and paid it off after five years. We helped our son with down payment on his townhome right after graduation from college. Our DD lives in SF but not sure if she wants to settle there or in Southern California where we are so she is renting for now. She is accumulating savings for down payment now after few years heavily funding her retirement plan at 40% of her paycheck. Now she only puts minimum into her 401k to get employer matching. Here person would need close to a million in down payment on a house to keep monthly payments at a reasonable amount.
We bought our first house for 120K shortly after we got married while I was in pharmacy school. We had the down payment but I think my dad had to co-sign so we could qualify. That same house would go for 1.2 million now.
We gave DD1 10k when she and her husband bought their house. We will do the same for our other two.
We had been married 8 years before we bought a $165K house with maybe 12% down, it was all we could spare. We had 6% mortage and PMI, downpayment was combo of saving like misers, help from my folks, and cashing in bonds and life insurance I had. We sold it ten years later and turned the profit into our current (and only) home, which we paid off last year. It took us probably 5 years to pay my parents back the $6K they loaned us. DH had a student loan we finished paying off at the same time (unusual for the 80’s, but his parents really needed another boat )
Our kids did not have loans, DiL has 30K left on hers. S35 makes too little to buy a house; his partner makes quite a lot, they are looking but discouraged. S30 and his wife are in the same boat but thru average/good paying jobs, draconian saving, and a bequest from a relative, they bought a house this fall. 7% interest, significant repairs to be made, and the house cost twice what mine did at 2/3 the size. I don’t know how anyone under 40 buys a house unless they are very very well paid.
I bought my first house in 1996 with zero down payment. As a first time home buyer i qualified for a federal loan program that allowed for that. 5 years later I took the profits from that house sale and put it towards my next home purchase.
I’ll add…that first home mortgage was for $90,000 (we put $10,000 down) in 1986. 12% interest rate for a 30 year fixed rate mortgage. We refinanced a few years into that and took a 15 year mortgage and I think it was about 7%. Our payments were less on the 15 year. We refinanced that house two additional times, and we only lived there 8 years. Our lender had some deal if you refinanced with them, the closing costs were very low…like $100. Each time we refinanced, we took a shorter term…until the last refi when we actually took more loan because of the equity, and we used that to buy the land for our current home.
Our first house was $130k, we put down $50k. We were fortunate to not have any school debt and had our wedding paid for by my parents.
DH job also paid nice bonuses.
My oldest bought his city condo at 26 with a $150k down payment- he is in a high paying career which also pays large bonuses.
Hopefully my other kids will be able to do the same- they are all good savers. I’ve never thought of gifting a down payment but can totally see why some people choose to do this. I’m floored by some of the home values in certain parts of the country.
In 1982, we bought a coop in NYC for $162K. We put $87K down, which included a $30K loan from my parents. We paid that back quickly, using my year-end bonus. We weren’t kids – we were 34 and 32-ish – so we did have some money saved.
We sold that apartment five years later for $560K, which was rather amazing. That allowed us to buy in a very affluent suburb with excellent schools.
S1 and his wife were able to save during an internship and postdoc in North Dakota, which paid really really well but had absolutely nothing they wanted to spend money on. After they relocated to civilization, they were able to buy a $440K house. I don’t know the details.
S2, an abnormally frugal individual, saved $50K during his first two years of working after college. He and his GF at the time (now wife) bought a house for $167K with $50K down. Sold that for $290K and, now in Seattle, had to buy a house for $750K. Because of the move to Seattle, his salary went up 40%, but his mortgage payment went up 400%.
We bought our first and only house at 27, two years after marriage. It was a foreclosure for $78k with 20% down. I always have been a copious saver so the down payment was easy enough. That first interest rate was high, and I remember refinancing down to 7.125.
We saved my entire salary the first year of our marriage, which financed the down payment on our first house. We closed a few weeks after our first anniversary.
We never never managed to save for a down payment and we are still renters. I lost both parents recently and we now have enough money to finally buy a place. The housing inventory is so low, we have not found anything yet.
Our son is 25 and a big saver. He is enjoying living with his best friends now, but does plan to buy in the future. He maxes out his 401k match of 8% and still does all his grocery shopping at Aldi. Most of his savings are in a CD and the rest in a high yield account. He make far less than either of his roommates but has significantly more savings (yes they talk about all their financial stuff…so different!)
We bought our first house two years after I graduated and got married in the mid 90s. It was $100K and we put down 20%. My grandfather gave us $5K as a wedding gift and we saved the rest. Our combined gross FT income those years was between $40-50K. We spent nothing that we didn’t have to.
10 years later we got “lucky” in our area and sold it for $135K - we had put about that into it over the years - and bought another for $170K. We’ve probably put in at least $75K over the years. And until covid, we would have been super lucky to even sell it for $170K. Now we have hope that I could get what I’ve put into it.
I wish we could help our kids with a down payment, but the only way is if I win the lottery.
)