I want to buy.
A house that is.
Okay, not really a house. A townhouse. Or a condo.
Something (relatively) affordable. Emphasis on relatively.
A 15% down payment on a $500,000 condo is $75,000. That is NOT a small chunk of cash. It’s time for me to build up some relatively liquid, non-emergency funds.
I estimate…. a five-year horizon? I’m crossing my fingers that the housing market will have settled down and have truly become a BUYER’s market.
One can always hope. đŸ˜‰
While I’m just trying to save $30,000, I’m looking at about 4 years (when I’m 30) to try to buy something. It’s always difficult to pay rent….
There are a lot of cost besides your mortgage payments when you own your home. Real Estate taxes, maintenance, insurance…condo fees (should you buy a condo). And if the condo association vote and pass to fix anything in the building, you have to pay even if you don’t agree.
Coming up with the downpayment is just the beginning.
I depends on where you live too in determining what kinda of house (sq ft., rooms, amenities, etc.) you’re getting.
I am shocked when I hear people my age resigned to paying 500,000 for a house. Attitudes like that are ubiquitous and responsible for high prices in the first place.
Matt – it’s not just a matter of being “resigned” to pay for that much. (And I’m not even looking for a house… I’m looking for a condo!). Homes are expensive in the area where I want to buy. There’s no getting around that fact.
Luckily, as you earn and save more money,home prices should be dropping so that at some point in the future, the two will meet in a happy union of affordability!
good luck!
I wouldn’t wait too long to buy a home just for the sake of building up a downpayment. I realize that in CA prices have skyrocketed as of late, so you’d probably do well to wait a year or two, but that’s it. I’d save what you can for no less than 2 years and then buy whatever you can afford (based on income not on downpayment). You can always trade up later and rent out the first place.
As you wait interest rates will almost certainly rise (we’re still near historic lows) and home prices are likely to rise as well–even in CA. You could save more each month and actually be decreasing the % down that you can put on a median price home!
There are SO many special programs, tax breaks, loans, and mortgages available to first time homebuyers that it doesn’t make sense to put off the decision for no other reason than to save a downpayment. If you have good credit you can get a normal fixed rate loan with $0 down at almost the same interest rate as if you had 20% down.
I just bought my condo a year ago, and I’m SO glad I did. Yeah, it’s expensive (and luckily I live in a much more affordable area), but my net worth goes up $790 a month before I “save” a dime. I’m so glad I didn’t wait any longer.