Saving for a home downpayment

[GoStumpy]

Perhaps this could be a discussion... What methods does everyone use, or think of using, or plan to use, to save for a down payment?

I'm living in a Mobile Home right now, paying $900/mo mortgage, and it will be paid off in May 2017 if I make no extra payments... If I can get that paid off a bit sooner, my plan is to take my mortgage payment I pay now, and put that plus some extra savings $ into a savings account... at $1200/mo I should be able to save up ~$60,000 at 1% interest.

I'm currently paying ~$900/mo towards debt, if I can continue paying that much into savings as well as mortgage payment, that could theoretically be $1800/mo, or $90k in 4 years.

If I do things right I could have a healthy down payment for a home by 2020??? :)

[Captain Awesome]

I have separate bank accounts for all saving needs. When we were saving for a downpayment, we had an account just for that. Now it's just some furniture items Mrs. Awesome wants (argh) account, and car replacement account - in case our car craps out on us but it shouldn't. But it's nice to be prepared for it.

ING is good for creating multiple accounts on the fly and transferring money between them if needed.

[xjeepguy]

This is not what you want to hear but , if I was a young dude and shopping for a first home it sure wouldn't be here . I'd be shopping in AB or SK where prices are sane and good paying jobs are everywhere .

[Queen K]

This is also not what you want to hear but...cut out stuff.
What stuff?
Eating out.
Prepackaged.
Shop your own kitchen.
Alcohol.
Cable.
Extras on the phone bill.
New clothes. Thrift stores can be killer!
Garage sales are better.
Buy to resell. Know your market.
Cancel stuff.

Boring I know.

Sorry.

Not.

[GoStumpy]

This is not what you want to hear but , if I was a young dude and shopping for a first home it sure wouldn't be here . I'd be shopping in AB or SK where prices are sane and good paying jobs are everywhere .

This is absolute paradise, so we will definitely be looking here... or Summerland...

I have a good paying job, and plan to move into the autobody business, which there are a buttload of bodyshops around here... I ain't moving away from paradise!

[Queen K]

It is paradise. When you're not house poor.

I admire your conviction to succeed here.

I should also add, make a double payment on your mortgage. At least once a year.
Banks HATE that.

[GoStumpy]

Cancel stuff.

Boring I know.

Sorry.

Not.

I agree, have been looking at all those things over the past few months, as you may know I'm a hardcore budgeter (using YNAB) to track ALL my expenses, so I know exactly to the penny how much I've spent on all those things over the past 6 months... we're doing pretty good, always room for improvement, but we've been putting an average of $930 to debt payments which will be DONE this year, and then that $930 can go to the mortgage, doubling our mortgage payment, and then into savings... we're doing pretty good :)

Looking to see if anyone else has any other ideas though! Thanks for the input :)

[GoStumpy]

It is paradise. When you're not house poor.

Yep... we've been paying our 10year mortgage on the mobile home since 07, with the pad rent we're paying ~$1300/month. I clear $2500/mo take home, and we actually tried living on one income before... that's where most of my debt came from :p

Now the wife brings home almost as much as I do, and we're clearing an average of $5k/month, with $1300/mo home payments and ~$900/mo debt payments, we're essentially paying half our income to debt/home. I'd LOVE to reduce that to 35-40% and have some breathing room to save for retirement...

House-poor sucks!

[xjeepguy]

This is not what you want to hear but , if I was a young dude and shopping for a first home it sure wouldn't be here . I'd be shopping in AB or SK where prices are sane and good paying jobs are everywhere .

This is absolute paradise, so we will definitely be looking here... or Summerland...

I have a good paying job, and plan to move into the autobody business, which there are a buttload of bodyshops around here... I ain't moving away from paradise!

Yep , but in 5 years of working there , with the reduced housing costs and lower cost of living , you could come back here and probably pay cash for a house .
Just tossing ideas out there .

[GoStumpy]

True, for someone or a family that is willing & able to move away temporarily to get themselves into a place where they can buy a home, is a very good idea indeed!

Paying cash for a house really sounds delightful... it'll take 10 years saving $1800/month at 6% growth to get $300k saved.

Would be pretty sweet to buy a house with cash in 2023 though!

[Glacier]

I would never buy a house without 20% down, but that's just me. I have my down payment, but at 11% return it sure is tempting to let it sit there and make money for another couple of years. Maybe I'll pay cash for my first home too.

[GoStumpy]

I agree. I purchased my current mobile home with 5% down, and even that was borrowed...

Now I'm adament that I'll have a LEAST 20% down, but personally, I want my mortgage payment to be ~1100/mo, so depending on what the home purchase price is, determines my down payment, not my mortgage payment.

I'm hoping for ~120k down on a ~$300k house, so that would be ~40% down :)

[Static]

If you are that good a saving, I would build a $200k portfolio then use the dividend income to pay your mortgage.

[Homeownertoo]

I have separate bank accounts for all saving needs. When we were saving for a downpayment, we had an account just for that. Now it's just some furniture items Mrs. Awesome wants (argh) account, and car replacement account - in case our car craps out on us but it shouldn't. But it's nice to be prepared for it.

ING is good for creating multiple accounts on the fly and transferring money between them if needed.

This is an effective strategy for forcing yourself to think about major financial needs and preparing for them. I used to do that but now only need a separate account for new cars. Following this strategy could prevent a lot of headaches down the road.

[Homeownertoo]

You may want to consider the financial horizon. Currently and for the foreseeable future, it is low low interest rates. But that could change within the horizon you have outlined for accumulating a down payment. Given that, I'd go with an earlier smaller down payment with low interest rates locked in for at least five years than maximizing a down payment at the price of facing higher interest rates right off the bat. Good luck, you are on a responsible track. And while you have such a good grasp of current spending, you might consider using that info to create a lifelong financial plan that gives you some idea of when you can retire and with how much.