How much should you have saved up before buying a house?

I just bought a house and put 20 percent down. Just make sure you have enough left in the bank for months ahead. I'm not sure how people define six months worth, but you need to have a decent amount saved up after putting in the down payment.

The rates right now for home buying are ridiculously low. Now is the time to buy.

I close next Wednesday. An exciting time.

 

Whatever you decide, make sure to pick a house with a big driveway and install a basketball goal. Then do a CF open house, pot luck, basketball party. Then we can all get together and talk about how great Jeremy Lin is.

 

which parts are misleading? i think it sheds a lot of light on the other side of home ownership. all most people hear is how great it is. it's not all roses once you own a home.

 

$330k

 

I'm closing on a home that's around your price range as well. I put down about 35%. 15 year loan, 2.87 rate with 3.0 apr.

For 230k, why not try to purchase a new home and get what you want? Not only will you get the better technology, energy efficiency etc, but you'll also get the home exactly the way you want it. Btw, make sure you get your home inspected and have anything fixed prior to closing.

 

I have heard that an advantage from buying homes in established communities is that there isn't a carrousel of owners.

New communities will bring years of different types on neighbors and recently houses constantly for sell

 

You should be more concerned on the house you are buying vs how much to put down. With the market at the bottom, this isn't as big of an issue as it was a couple years ago.

If you get a great deal on a house that will move quickly if you must sell, its not so bad to put 10% down. If you find a house that really fits you, but it will be harder to move and the deal isn't so great, put more down.

Avoiding the "keeping up with the Jones" mentality is more important. The 6-12 months of emergency reserves is not so hard if you are not financed to the hilt.

 

I'm in a similar situation with a similar priced house. I'm rolling with 10%. I'd rather not over commit my money and have more back in savings.

I'd just evaluate the mortgage payment difference between financing say 208k[10% dp] & 185k[20% dp] to decide if it's worth committing that extra 23k. To us it's not. I'm also buying new and feel like i'm getting a hell of a deal so i feel like i'll have 15% equity from the get go...so that helps. Market is rebounding so I'll have 20% in my estimations in another 2/3 years.

 

1. It would be stupid to pay off a 1.7% loan early, unless you got the excess money.

2. Buy the house because you want to be a home owner. Not because of tax deductions, and not because it's a good investment (most likely, it's not).

3. Other potential costs. Looks like you've ran your numbers to include mortgage, property tax, insurance, and HOA fees. Like you said, don't put down less than 20% because of the PMI cost per month adds up. Biggest thing is probably new furniture to fill the empty space. Yard maintenance. Utility bills will be higher. Unexpected problems like hurricanes and foundation issues will be rare but costly.

4. I don't see why investment isn't a liquid asset. Sure, you never want to be forced to sell your stocks, but they are a legitimate emergency fund.

5. It's a seller's market in Houston right now. Houses in good areas of town get sold within a week, so that's driving up the overall housing prices. Mortgage rates are low, but should be gradually increasing as unemployment rate comes down. IMHO, it might be more expensive the longer you wait.

 

this. don't underestimate points 2 and 3.

i say if you're not feeling too good about putting down your entire savings, you're probably buying too much house or need to find something less expensive. nothing beats peace of mind. find a place that costs 25-35% less and you'll sleep much better.

 

We bought a $250k house (first home) last year. We could have put 20% down, but the house is a fixer in the Heights so we figured we'd keep the money for renovations. We have to pay PMI (property mortgage insurance), which is like $130/mo that goes straight to the bank. Kinda sucks. But, we're in the process of remodeling the kitchen and have already done a lot to the rest of the house. Come May, we plan on refinancing. Based on comparables, house should be appraised for around $350-400, which we'll then have 20% equity. Lower rate, no PMI, monthly payments will be cut by 1/3, and a nearly brand new house, all by keeping the money for renovations.

Now, if this house were already complete, we would have put the 20%. But, this was the smart move.

 

That's true. Beware of all the hidden costs of owning a house. If you are buying an old house, the potential cost of fixing the sewer pipe (which will be substantial), upgrading the electrical supply, termites, etc can really throw your budget off balance.

 

2. you know, i thought this too... 2 Bedroom apt for just two people is not enough. until my SO and i moved into a 3 bedroom/2 bath, 1700 square foot house. we don't even use the 3rd bedroom or the second bath. guests stay over maybe 3 weekends out of the year. it's just more space for us to fill with furniture we hardly use. not to mention the extra heating and cooling.

3. depends on how big your yard is. $30 is on the VERY low end for a small yard. if you don't mind doing it yourself, you could find your weekends preoccupied with raking, weeding, and mowing. we have a huge yard. it's at least $80/month if i'm going to pay someone. i can't stand the extra expense so i'll put in the sweat equity. its not fun at all.

just food for thought.

 

yea, kids does change things. good luck on your purchase man. i just wanted to provide an alternate viewpoint, not trying to discourage you. home ownership has its advantages but life was much easier (for me) when i was renting.