How Long Have You Been Saving For Your Down Payment?

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Priced_Out_IT_Guy_IHB

Priced_Out_IT_Guy_IHB

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<p>How long have you been saving for your down payment? How much longer do you estimate you'll need to save? What is your savings strategy and vehicle of choice (CDs, gold, investments)? What do you do to save extra money each month?</p>

<p>I'm very interested in what post-bubble home buyers out there are doing. Does everyone have $100,000+ burning a hole in their pockets for 20% down on a half million dollar home and just timing the market, or are lots of Irvinites metriculously counting and saving their pennies each month? Do people even save anymore, or is everyone just trying to pay off their debt? </p>

<p>I'm going into my second year of saving for my down payment. I started Feb 1 of 2007 after paying off <strong>all of my debt</strong>, including my new Toyota Tacoma. It sure feels nice not to owe the bank anything, and it helps make the sacrifices of savings that much sweeter. (By the way, if you're on the long journey of paying off your debt, I salute you. The struggle will be worth the effort! My significant other has been struggling to pay off her debt for several years and the end is now in sight. For her, paying off one's debts is akin to the removal of a burdensome weight and the release of shackles from one's feet.</p>

<p>My savings goal is about $70,000 or 20% of a $350,000 mortgage. Loaning more than $270,000 from the bank would be an uncomfortable payment for me as I am a first time buyer and I'm not coming in the door with any equity.</p>

<p>Savings tip: Brown bag your food to work. You can easily spend $25 a day on coffee, a breakfast pastry or egg burrito, lunch, and any other goodies such as lotto tickets, gum, or sodas and energy drinks. Thats $25 X 21 work days per week = $525 per month, or over $6,000 in one year--a significant savings. Not only will you reach your down payment goal faster, but you're gauranteed to eat a healthier diet.</p>

<p> </p>
 
<p>My wife and I sold our albatross of a condo in Tustin Ranch in July, 2007 and received a grand total of 6.5k back from escrow...basically lost 45k in a little over 2 years of ownership and we feel so lucky to not have lost more. Took the 6.5k + savings of 12k and decided to pay off the car to be debt free (except for low interest student loans).</p>

<p>Now we're in the same boat as you...starting our house down payment money from ground zero, much poorer financially but oh so much wiser thanks to Irvine Renter and IHB. We are fortunate to have good solid careers that allow us to save more than 50k/year on top of our retirement contributions, baby (soon to be babies) college fund and reasonable living expenses. We'll buy when it makes sense for us...right now, me and da wife just enjoy looking at houses on redfin sometimes and laugh at the asking prices.</p>

<p>I realize now that owning a home isn't the be all, end all of our existence. It's not going to cure what ails you, nor give you much enjoyment if you are not a good match for that house (and vice versa). It's a luxury good, in my opinion, and until you can truly afford the purchase and maintenance of a house and develop the responsibility to be a home owner, life is so much freer and less stressful as a renter. Just find a nice detached house with a good landlord, and the months or years spent saving for your own house may go by pretty quick!</p>

<p>Good luck!</p>
 
<p>Yep, on the road to paying off all those darn debts. Unfortunately, the journey is just beginning for me. But I'll get there. </p>
 
Yeah I got around 100k burning a hole in my pocket, but I also am not so eager to blow my savings on a tiny ol' condo either.



I guess you could say I've been saving for my down payment since I started working (right before 18). Of course, I was making about a third of what I make now, so it wasn't that much.



A good portion of my career has been as an independent contractor, so I've always been good at saving since I never knew when I'd get my next check.



Theres no way I'm going to spend my whole hoard on the down payment though, as I want to have plenty of reserve so I don't ever 'need' a job, also so I'll be able to furnish my place with goodies.
 
I haven't been saving much yet as I'm paying off a 2nd mortgage on a house I own out of state...BUT when that's done in another few months, I plan of socking away about 2K a month. I will only have about 50K when I decide to pull the trigger in a few years. Hopefully the downpayment required of me will only be 10%, or else I'll be waiting about 5 years before I buy. sigh.





Funny, sometimes I wish the downturn would slow down a bit so I have more time to save !
 
been saving for about 6 years now. I have most of my (down payment) money in online savings accounts, bank cds and a small portion in GLD. I hope to buy a smaller place 1500sq ft 3/2.5 (probably be a detached condo) in a newer area of irvine. If prices drop to where i think it will be in a couple of years.. i'm hoping to pick it up for < 450k... the amount i'll put down will depend on where interest rates are and if any investment opportunities presents itself.... but definately at least 20%.



saving money... i go by the 60/40 rule. i keep my living expenses (housing, food, clothes, etc.) to 60% of my take home pay... the other 40%, is broken down by 10% emergency fund, 10% long term savings, 10% short term savings, and 10% fun money. (i have zero debt... but if you have debt, you would pay down debt with the savings portions)
 
Trooper, I wouldn't worry too much about the speed of the collapse if I were you. Even though prices have fallen a lot in the past year, they have a lot farther to fall. Also, I wouldn't expect the collapse to stop at fair values. Just like the market overshot on the upside, it will overshoot on the downside. And given the hundreds of billions (or trillions) of dollars that lenders are going to lose, I would expect credit conditions to remain tight for a while. This means that even after we stop going down, it will be a long while before we see any significant appreciation.
 
villagepeople, I like that 60/40 rule. Looking at my budget spreadsheet, if the wifey and I get the house we just put an offer on, looks like we'd be playing along with the 60/40 rule, too.



We have an emergency fund already and plan on using most of the 40% to pay additional on the soon-to-be mortgage. We've saved at least three months so far for a downpayment. Our downpayment is going to be at least 5% down, seeing as we don't have a full 20%, and the house we put an offer on is REO and just got relisted. We didnt' expect to list so fast and were going to save as long as it took. We jumped, though, because the price is killer. Talk about rollback, the current list is less than the place sold for back in early 1998!
 
My SO and I have been saving for about 2 and a half years. After this Winter we will have approximately $100k in cash savings (401k/IRA don't count). Since it looks like we won't be buying anytime soon (props to IHB/IR/Zovall/ISM), we'll have more than enough time to payoff our two cars, a wedding and have money left over to pimp my future home.



The path to savings wasn't easy though. We gave up movies, meals over $30, vacations and miscellaneous toys. Of course, everything must be done in moderation so we still enjoy life a little:



- Mini Vegas trips

- $1 DVD rentals

- an occasional lens for our dslr

- Pinkberry
 
i do the 60/40 rule in terms of spending. rent is fairly cheap where i live, and i get to do a lot with our money. We have been saving for aboug 2 years and by next year we should have our 20%.I think we can save more but since we dont have big payments we tend to get carried away with buying stuff for entertainment like TV, bike, gadgets.
 
Huh. I just checked, and I save exactly 40% of my net every month. Guess i'm gonna have to agree with everyone saying to do that.



Of course, when I buy, it'll end up being more like 10% but oh well.
 
<p>Save 40% of net each month... Sheez. The wife and I are lucky to put away 5% after funding 401k, wife's pension, 529 plans, taxes, etc. each month.</p>

<p>Then again, we spend around 22% of our net on daycare, so we're not really in a position to save much. The nearly $3K out of pocket every month on nanny AND pre-school would sure go a long way towards extra mortgage or savings!</p>

<p>And to answer the question of this thread, we started saving to buy our move-up house pretty much right after we bought our condo in 2001. Our rate of savings really cratered when we had the 2nd kid, which oddly enough, very nearly coincided with the peak of the local housing market. I think my son's birth crashed Irvine RE prices somehow... Gonna have to look into that. Maybe get him on some talk shows or something. </p>
 
<p>This is about year 5 for me, it REALLY irritates me that I have to save for the house alone. I'm at least consoled by the fact that I've kept it going for almost 5 years and am in a pretty good boat ~1M.</p>

<p>I've pretty much saved for a pretty decent house. BUT i'm shooting for a house in the 400-500 range. With all the taxes and fees combined, i'm trying to get the residual money to earn enough interest to pay for it. So about 400-500k will keep the house payment at or near 0. Then I just need to think about what to do if I decide to work.... Its not as easy as you think though.</p>

<p>good luck</p>

<p>-bix</p>
 
ninja, just wondering... so when you decide to buy, if i'm reading it correctly, you are going to take out a loan and use the interest or cap gains on the 1M to pay the mortgage... why don't you just buy the house and not have a mortgage? i'm not saying if it's right or wrong... just wondering what are the benefits of doing that.
 
Wow, I'm beginning to realize that there are a lot of people with money on this blog. As for us, we're not planning to buy until 2009 or 2010. At that time, we'll just sell my girlfriend's condo and use the proceeds as a downpayment for the new place. As for me, I don't believe in making money unless you can useit to enjoy life. But I guess there will be HUGE sacrifices when we have kids.
 
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