How Do People Afford $400k Houses and Up? (foreclosed, legal, lenders)
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Just a general question but I often watch shows like House Hunters, My First Home and Property Virgins and the buyers had budgets of $400k and up.
I always wonder how do people (in general) afford such high price homes and where do they get the down payment money?
Is it equity from a previous home? Savings? Inheritances? Are these people just highly paid? Cashing out 401K?
How do people do it? Can anyone share some experiences?
Some people have no choice because they live in areas where small fixer uppers cost $400K and up. Normally they make more in that area, but of course there are minimum wage workers everywhere and I don't know who they can even make ends meet. Now a $400K mortgage.
here is a calculation which shows you only need an income of $77K to buy the home and payments as low as $1800 a month, but taxes and insurance will add to that. It doesn't say with how much down, but you can put less down and pay more per month.
OP: apart from my earlier comment, I'll point out that those shows (well, at least House Hunters) also show plenty of episodes where people have price limits of around $200,000 and under, which happen to be some of my favorite episodes! There's something there for everyone and not everyone can afford a $400,000+ home.
$400,000 for a home? You want to know what $400,000 buys you in my area? Not much. Homes sell well here where I live and if you can find a $400,000 home it will not last long at all. I have no idea how people buy homes. I always thought that they save up the down payment, make sure that they have a job that pays, and go from there. In out area you can get first time buyers assistance. Not that it is a good thing. You will end up paying PMI until you have paid off 22% of the original cost of the home.
One of my co-workers son's and his wife recently went under contract on a $600,000 home. They both work and have a combined income of over $160,000. For the past 5 years they have been saving their money living as cheaply as possible. They live in a small apartment right now. They put down just over 20% of the cost of the home or just over $120,000 that they had saved over the years.
Another close friend and his wife lived with her parents for the first 7 years of their marriage saving money for a down payment. That was over 20 years ago and when they bought their home the house cost less than $240,000. They also put down at least 20%.
Just a general question but I often watch shows like House Hunters, My First Home and Property Virgins and the buyers had budgets of $400k and up.
I always wonder how do people (in general) afford such high price homes and where do they get the down payment money?
Is it equity from a previous home? Savings? Inheritances? Are these people just highly paid? Cashing out 401K?
How do people do it? Can anyone share some experiences?
I always wondered this, too, especially since most of them are very young couples. Could be anything - help from family, inheritance, perhaps they made money in prior real estate.
I don't attribute it to income since the couples tend to be so young, with often only one of them working.
$400,000 for a home? You want to know what $400,000 buys you in my area? Not much. Homes sell well here where I live and if you can find a $400,000 home it will not last long at all. I have no idea how people buy homes. I always thought that they save up the down payment, make sure that they have a job that pays, and go from there. In out area you can get first time buyers assistance. Not that it is a good thing. You will end up paying PMI until you have paid off 22% of the original cost of the home.
One of my co-workers son's and his wife recently went under contract on a $600,000 home. They both work and have a combined income of over $160,000. For the past 5 years they have been saving their money living as cheaply as possible. They live in a small apartment right now. They put down just over 20% of the cost of the home or just over $120,000 that they had saved over the years.
Another close friend and his wife lived with her parents for the first 7 years of their marriage saving money for a down payment. That was over 20 years ago and when they bought their home the house cost less than $240,000. They also put down at least 20%.
This is what almost 1/2 $Million gets you around my neck of the woods. Note the lot size is smaller than most of those houses. Edit: I see it is not listed here, the lot is -1500 sf. Oh yeah. And they even dropped the price $5k- such a bargain now.
While it is an overall desirable neighborhood/urban location, this isn't in a better area within it, surrounded by apartments.
I have no idea how folks afford a regular, decent sized house on a good lot much less these doll houses around here. All I know is I'm glad we bought 20 years ago, it wasn't cheap compared to the rest of the country, but it was in line with prices in other desirable cities at the time. Now it is just crazy.
This is what almost 1/2 $Million gets you around my neck of the woods. Note the lot size is smaller than most of those houses. Edit: I see it is not listed here, the lot is -1500 sf. Oh yeah. And they even dropped the price $5k- such a bargain now.
While it is an overall desirable neighborhood/urban location, this isn't in a better area within it, surrounded by apartments.
I have no idea how folks afford a regular, decent sized house on a good lot much less these doll houses around here. All I know is I'm glad we bought 20 years ago, it wasn't cheap compared to the rest of the country, but it was in line with prices in other desirable cities at the time. Now it is just crazy.
Well that is crazy. LOL I realize we are not as bad as some areas within the state. Compared to other states though, even over in Oxnard prices are way up there.
2000sf lot in Brooklyn ain't too shabby, even though the structure is, with urban codes that I'm sure allow a good sized, probably multi-family structure. There was a similar shed/house in San Francisco on a tiny plot that I think went for something like $800k- a couple of hundred thousand over asking if I remember right.
2000sf lot in Brooklyn ain't too shabby, even though the structure is, with urban codes that I'm sure allow a good sized, probably multi-family structure. There was a similar shed/house in San Francisco on a tiny plot that I think went for something like $800k- a couple of hundred thousand over asking if I remember right.
It's all cash offers there though.
The people who buy these type of places know the right people to get their work pushed through, even if it wasn't allowed in the first place. That area is just a few short blocks from a HUGE train yard and they get people to buy condos they've built right next to it, so there will always be buyers as well. That area is just meh---kind of ugly.
We have people on a regular basis in my neighborhood just come in, buy a property for over a million (huge house), raze it, build a practically new mansion from the basement up and it kind of makes me sad when the houses aren't even in bad shape. Actually one guy illegally tore down an entire house and years later, because of all of the legal issues, it's still just an empty lot. Honestly, more than anything, it just blows my mind how many people have the money to do the things they do to houses here on a consistent basis.
Someone down the block from me completely gutted a house and spent a ridiculous amount of money on the outside, which isn't even complete. Now they are trying to get 1.2 million on the house that needs to be completely redone in the first place, when you could probably just get a house that's ready to go for the same price. I guess they can always try.
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