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For me, the biggest way I'm "saving" for a first time home is paying off existing debs, mainly student loans with a large amount of interest.
One other thing I considered was downgrading my car. With my current expense structure, I do drive a luxury car, but the $550 per month payment is going to HURT once we actually purchase the house as its not going anywhere for another 4 years, unless I make a significant payment. I've been looking at downgrading to the non-luxury equivalent of my car, likely used. Doing the math and trying to figure out at what point I won't be underwater on my loan is quite the feat though. The interesting thing is the non-luxury equivalents if you buy new generally have much better loan terms (ie: 60 months with 0% interest). It looks like it would decrease my payments to $325 per month (but extend the loan for 2 years -- yuck!) but the difference between 0% interest on 25K and 5% interest is probably worthy of the math to understand if there is any savings.
I am currently just paying about $30-$50 more than the minimum payment each month for my student loans. I really would like to use as much of my funds to my savings account now, rather than pay back my debt as quick as possible.
Once I'm in the house, and hopefully have my live in tenant on board (charging rent that is equal or close to my mortgage) I hope to then start paying down my student loans more aggressively. If my mortgage is around $800/month and I charge $750/month in rent, that frees up a LOT of funds for paying back student loans.
I hear you about the car! Luckily, right now, I do not have a car and just take Public Transportation ($112/month unlimited metro card) but will need a car once I move back to Virginia. That's another reason why I am more worried with building savings rather than paying back debt quicker- I have a car to pay for! Having a car payment is something I would like to avoid so I am factoring in $7000-$8000 to pay for a used car and 1 year of car insurance. I am probably going to go this used car lot my Dad recommended since it is where he has bought his previous cars.
This isn't what's being suggested. The article is focused on saving for a downpayment and suggests taking on extra work temporarily to help save for that, not committing to working your life away in order to buy a home that you can't afford. Working weekends or evenings for a few months now in order to put more money down in exchange for a lower payment for 15 to 30 years seems pretty reasonable to me.
Agreed. With the caveat that if you have to "burn the midnight oil" to save for a down payment that's only 5% or 10%, then reconsider, but if you are "burning the midnight oil" for a few months in order to put down 25% instead of just 5% then of course, more power to you!
Thanks- LizfromtheBronx. Yeah, I was just looking to make acouple hundred. I want to start fresh anyway in the new house so I’m not takinganything with me except my bedroom furniture set and TV lol Since I have to usemy credit cards anyway to show utilization, and my ability to pay back I spendthe money on all home goods (leave them at my parent’s place in VA). A littleeach month goes a long way so I don’t have to scramble around last minute. I’mthinking Craigslist is the way to go- from your post. I think I will startthere. Either we can meet in Harlem where I live or in Midtown where I work(whichever is most convenient)
True. That is what I am hoping for. I just want to free up some space in myroom, (less to move!) and make a little pocket cash that I wouldn’t have hadotherwise had I just gone straight to a charity and donated.
Oh I do not have any furniture or anything large that takes up space. I will be starting fresh and will need to buy furniture when I get there. I also need to take that into account when I talk about my overall savings account (not just down payment). All Icurrently have is my furniture set and a ton of clothes to get rid of.
Absolutely agree about burning the midnight oil. I should have beenmore clear in my post. I work multiple jobs (not just over time at 1 job).
Mon-Fri: 9a-6p (career, main job) Sat-Sun: 9a-6p (street fair sales person) Sat- 8p-2a (was working coat check – when the weather was colder, probably won’t be back upuntil this fall!)
I’m 41.6% to my savings goal and have my end goal deadline as February 28,2015 and really just need to push this final stretch. Every dollar counts atthis point so was just trying to see what I was missing. I think I will try Craigslist- 1 item at a time. If I bundle it, it may limit my opportunity.
Tell me about it! lol As for your previous post, I am not even planning to put down 25% (which was the initial plan to avoid PMI). Now that I have a car to factor in and other side costs, I decided that I better just stick with putting around $10k-$15k down instead.
March 31, 2015 Goal Savings: $30,000
August 8, 2015 Current Savings: $11,000 (average monthly savings of about $2,300/month)
Expected Breakdown from the $30,000 savings account:
-$12,000- House Down payment and 1st month mortgage payment (could vary...)
-$3,500- Closing Costs (really going to try to push to have seller pay this, but I'm just being realistic)
-$4,000- Lender service fees, Homeowner's insurance (estimate only)
-$400- Home Inspection (estimate only)
-$100- Termite Inspection (estimate only)
-$500- Appraisal (estimate based on sq. footage and location)
-$7,000- Used Car (hoping to pay for a car in full, no car payments)
-$350- 1 year of car insurance (rough Elephant auto quote)
-$2,000- leave in account to show a few months of mortgage payments
-$150- Thank you gift for Realtor!
I just finished reading Nolo's Essential Guide for First Time Home Buyers and from what I gathered, the above is what I will need starting off. As for furniture, I am buying items from now until next spring and leaving them at my parents' place in VA. That way, I won't have to scramble last minute for things. The only furniture I currently have is my bedroom set and I am looking at 4 bedroom, 2.5 bathrooms so therefore will need lots of furnishings!
I just keep seeing the light at the end of the tunnel and know that everything will be worthwhile once I move in- bring in a tenant, and have some financial wiggle room by not having to pay mortgage/rent. I am really hoping that is the case lol I am a first time home buyer so I am trying to be very realistic about this whole process and soaking up as much as I can for the next 8 months.
Any and all advice is welcome with the upfront costs/breakdowns anyone has experienced when buying a home!
The 3 times I've bought a house - they bought me a gift.
haha what?! Well, I guess it is a win-win for both parties. In the book I read, they made it pretty clear that you should be thanking them for their time so I made a note that I will buy them either a gift card or nice basket of goodies, champagne, SOMETHING lol
Of course, if they were to get me something as well I wouldn't decline
I didn't even think to use Facebook as a tool. I don't really want to 'swap' though, I'd prefer to sell and make a few bucks Unless you can sell on those swap groups as well!
you can sell in the swap groups i'm a member of. there must be groups in NYC also.
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