how much money did you save before buying a house?

posted 1 year ago in Home
Member
5518 posts
Bee Keeper

I think geography may play a factor into this.  We always planned to ask for sellers assist but when the house we chose had owners underwater, that idea went out the window.

I had about 25k in the bank, FI 14ish.  We had to use 20 of it for downpayment(3.5%) and closing.  X amount of the leftovers is earmarked for the wedding.

Member
264 posts
Helper bee

£50,000 deposit  (about $80,000) and a £200,000 mortgage. Such are they joys of living in the UK

(I want to go back to Austria oneday!)

Member
1100 posts
Bumble bee

We put down a generous downpayment (35%) but we also managed to save about 40K to start us off on the renovations we wanted to do (mainly monetary gifts from the wedding).

Member
959 posts
Busy bee

We are saving for a house in Aus & the minimum amount you need for a mortgage is 5% of the purchase price, some banks require at least 10%. In my city houses are expensive, a basic family home anywhere between $410000-$580000. So you need at least $25000 minimum deposit on a $500000 property and you need to show your saving history + pay mortgage insurance + stamp duty (about $20000). If you are a first home buyer the govt gives you $7000 & free stamp duty but only if it is a new home. Different rules apply in different states.

Member
2298 posts
Buzzing bee

On my first home, I put down 10% and also still had about 5 months of living expenses in savings, plus had a low enough mortgage payment that I had plenty of money left over ever month to rebuild savings/buy some stuff for the house.

I don’t regret that decision. 20% would have been ideal but being single that was a long way off and I got a great deal on a foreclosure. It appraised at 20% higher than I bought it for, so I had 30% equity when I closed.

FI and I will be saving for a house once we get married. We would like to put at least 50% down, but that is because we have excellent incomes and will live on his only, and we need to rent for a minimum of 2 years because of move plans. So those factors are a bit unusual and will allow us to save a lot. I’d be fine putting down 20%.

To your original question, we will always have 6 moths expenses in an emergency fund, on top of whatever we spend on a house. I also like to have a car replacement fund (we don’t do car loans), and then I would want to have at least several thousand in savings specifically earmarked for new furniture, decor, painting, and house stuff. 

Member
5761 posts
Bee Keeper

We had to bring more than $100k to the closing table (20% down payment and closing costs), so we had that money, plus 6 months of our expenses (our emergency fund), plus $15k for other expenses (moving, buying a generator, replacing the hvac system, etc.). Honestly, this house will need another $150k to bring it up to our standards, but we were not in the mood to wait that much longer before buying a place, so we’ll just have to be patient and take on projects as we can afford to pay for them in cash.

Member
6913 posts
Busy Beekeeper

@KellyLouise:  Is stamp duty the same thing in AUS as property tax in the US (i.e. is it a one time thing or is it yearly)?

 

Member
5673 posts
Bee Keeper

Another UK bee living in the South, where proces are even higher…

I had £10,000. FI had £10,000. It had taken me ten years to save that. My father loaned us £20,000 at 4% interest to make up the deposit. We then borrowed £120,000 from the bank, for a very nice terraced house which used to be a factory worker’s cottage.

Member
2365 posts
Buzzing bee

We are hoping to bring 10% of the house cost when we buy in about 18-24 months. In this area its difficult to save past that with the good houses starting at 300k for a town house! We will likely try to get something on land for about 500-600k a little ways out from the city. We are willing to drive and commute together if it means a nice home.

Member
2365 posts
Buzzing bee

@lovekiss:  I dont know how you guys saved like that. This area is rediculously expensive. We’re hoping to bring half that to the table. We will likely buy something that needs upgrades etc since we’ll buy a foreclosure on land. However we know once we get into a house we’ll be able to afford to make those changes since the mortgage will not kill us thanks to VA loan. We make good money but I dont want to spend 3-5 years saving to get a down payment like that.

Member
1485 posts
Bumble bee

Wow I am SO glad I live in an area where the average house is only about $100,000 – $150,000.

We are pre-approved for $140,000 but we’ve set our budget at $80,000. With FHA loan, we’ll only need to put $3-4K down, and we will JUST have saved up enough in the next few months for that to happen.

In the suburbs of Pittsburgh, you can get a 2 or 3 story house with 2-4 bedrooms, 1-2 baths, a garage, and a yard in a decent school district with average taxes for anywhere from $50 – $100K.

PHEW!

 

 

 

 

 

 

Member
264 posts
Helper bee

Oh god yeh I forgot about the £10k worth of stamp duty and legal fees on top, life is fun!

Member
5761 posts
Bee Keeper

@dewingedpixie:  We’re in our 30s, so we were both saving long before we ever met. I got my first house a decade ago in a cheap, semi-sketchy area so that I could afford to save for my forever home. And Mr. LK had always rented with roomates so that he could save. So yeah, it took a decade of saving to be able to afford buying in a nice part of this area. But the payoff was a 2200sq ft home (plus full basement) on almost 5 acres of land. Don’t get me wrong, Mr. LK has to commute 90-120 minutes each way to his office in DC, depending on whether metro is jacked up or not, and I commute 45 minutes each way to mine in Baltimore, but it’s worth it. You simply cannot get the peace and quiet and space that we have here anywhere close to the cities. But yeah, it’s sad when half a million buys a fixer upper and it takes 18 months just to find a house that comes in at THAT price tag.

Member
352 posts
Helper bee

@Stace126:  No offense Stace, but what suburb of PGH are you talking about? I live there too and I think you need to add at LEAST another 100k onto that number for all that you described.

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