Yeah, I don't get the whole "I paid cash for my house" thing.
Especially since I saved for 10 years in a HCOL area so I could put 25% down (wanted to keep the payments at a certain level). To pay cash, I might have been able to do it before I retired. ;D
I think we put about 5% down. We bought a house we plan to stay in and should have it paid off around when the kids hit college. I had no desire to rent until we could pay cash - our rent was heading for $1,000 and our mortgage is $1,400 with a tenant paying us $550. Yes, home ownership has additional costs like insurance and taxes, but we probably would have had to rent a bigger place to have kids. For us, buying made a lot of sense.
First house 0 down, 80/20 loan (owned 3yrs) Second house 50-60% down (profit from first house, could have nearly paid it in full). 30yr mortgage, refi'd down to 15yr, now a rental Third house 3.5% down, FHA 30yr loan.
**buying our first house netted us approx $220k profit in 3yrs. No way in hell would we have ever saved nearly that. I was a SAHM & even if I worked F/T we'd have saved maybe $50k in 3yrs. We really lucked out/timed it right.
I don't know how we would have paid cash for our house unless we would have bought waaaaay under what we were looking for and/or would have stopped retirement contributions and all other saving. As it was, it took us about 4 years to save the $50k we put down anyhow.
Post by stingsharkruns on Jan 9, 2013 10:11:43 GMT -5
We originally were going to do an FHA, but 2 weeks before we were closing the bank figured out that FHA would not finance bc our house wasn't up to their flood zone standards (which are different from state standards)
We ended up doing a regular loan, but since our house appraised for more than it's worth, my Dad was able to give us a "gift of equity" as our 20% down payment.
Post by barefootcontessa on Jan 9, 2013 10:12:47 GMT -5
first house: 15 down/ next house: 20 down
I do not like the idea of having so much cash tied up in a single entity, particularly when there are significant tax benefits (that may be going away, though). It makes more sense to me later on in life when we have other assets.
First house we bought with a conventional mortgage and about 5-6% down. This one we bought 0% down VA (because we were relocating on short notice before last one sold). The next we are saving up to pay cash. I'm not paying down this one because when the job we want in the location we want opens up, it won't last long and we want the option to move immediately and not be tied down by a house here.
We have put at least 20% down on each house we have purchased. Even if we could buy a house with cash, the rates plus tax advantages of the mortgage deduction help offset the costs and allow us to invest elsewhere.
I'm going to guess a lot of the "we bought a house in cash" people can buy a house for well under $200K.
My friend's first house cost $32,000. She didn't get a mortgage, she got a line of credit. It was in a rural town and small but totally liveable. It would cost around $150K in the city.
I just want to know how to get 200,000 in cash while working a middle class job that pays 65k and being able to eat.
Depends where you live, how you are living during that time (how do you define "being able to eat"), and how long of a time frame you're talking about. And is it family income of $65k or two earner home.
If I lived in my hometown paying cash would be totally feasible. Houses are very cheap. By the time H and I save up for a 20% down payment on our forever home here (assuming we'll be here still) it will be the same as if we paid cash for my SILs 4 bedroom, 3 bath, 2 acre home in the midwest.
#1 mortgage, 3% down #2 mortgage, 10% down #3 mortgage, 20% down #4 mortgage, started with only 5% down, paid another 15% when DH and I both sold our previous homes #5 mortgage, 5% down
Especially where we live now, paying in cash would never happen
Our first house was an FHA with 3.5% down, seller paid closing costs ($103,500).
We custom built our new house. We bought the land about 10 months before breaking ground with a 20% down land loan. Then we got a construction to permanent one time close conventional loan with 5% down. The equity we had in the land served as our down payment.