I have $0 saved for a down payment. I want to buy a home in five years. What should I do? Go:

[_D]

Buy through upromise and save even more on your update.

[30ecb]

Does any of this advice work in California?

[Cereon12]

Since your credit score is so high if you live in a area that’s in a USDA District then you wouldn’t have a down payment to put down cause it’s 100% financing... Any score from 640+ and up can get a USDA Loan with no down payment.

[_D]

Is this related to the USDA up to 80 acre giveaway if you are going to grow?

[Brainswbeauty]

Wonderful response

[Galexg]

All the advices I read below are bad. You want to buy that soon and not wait 5-10 years like all these nutheads are suggesting. Get a second job or create a second job. Start a landscaping company, painting houses on the weekends, uber... whatever gets you busy. The busier you are the less money you spend, the less you have to go into dumpsters eating out of trash cans the more money you make for that 20% down payment. If the mortgage is slightly above the price you were looking for.... buy it and rent some rooms out.

[Heyitschara]

What baby step are you? I’m on number two.

[Chanaysk16]

I know a down payment for a house in Colorado is $10k and you can save up $10k for 2.5 years fast .. If you set aside $300/500 a week or a month.. For a condo its $5k .. You have to cut down like Comcast, ..etc to make improvements to saving.

[victorvanhyfte]

First of All: 1) you need to START SAVING MONEY any way you can and probably put it in a Credit Union Savings Account since they are currently paying better interest than a Bank. 2) You need an EMERGENCY FUND of at least 6 Months of your Net Salary after Taxes. 3)Don't take on any Debt or Limit it to a Bare Minimum.  4) Apply for a 0% Credit Card with at least 18 months Interest Free that ALSO HAS FREE CREDIT FICO SCORE MONITORING and use it to make small purchases and then make MORE than the Minimum Payment Every Month by either paying off the balance every month or paying at least 4 times the Minimum Payment. Your Credit Limit will be Increased by the Credit Card Company Eventually and Your  FICO CREDIT RATING SCORE will most likely INCREASE if you play it right. 5) Check online to see if YOUR STATE has a FIRST TIME HOME BUYER PROGRAM that YOU CAN QUALIFY FOR. Usually they have DOWN PAYMENT ASSISTANCE and LOWER INTEREST RATES. 6) Find a Home you want to Purchase and work with YOUR REAL ESTATE AGENT, NOT THE SELLER'S AGENT to Make a Purchase Offer that requests Cash Back From the Seller at the Closing to USE FOR CLOSING COSTS AND FEES. I did it. The Seller gave me $3,000 for Closing Costs, MY STATE gave me $2,500 for Down Payment Assistance and I bought a $97,000 House for ONLY $1,300 out of MY OWN POCKET. 7) Make sure that in YOUR OFFER TO PURCHASE you RESERVE THE RIGHT to HAVE THE PROPERTY INSPECTED by A HOME INSPECTOR, Request the SELLER PAY FOR REPAIRS(VA & FHA require it), or get CASH at Closing for the Repairs. AND, have ESCAPE CLAUSES, i.e. SUBJECT TO's built in so you can back out of the deal if it's a MAINTENANCE MONEY PIT and the Seller won't budge. Let them keep it! A good BUYERS AGENT will PROTECT YOUR BEST INTERESTS. 😎 GOOD LUCK, My FIRST Property the Seller wouldn't pay for needed repairs so I dumped him and found another Property and An Initial Offer, Seller Counter, and My Counter Offer, Seller Acceptance and VOILA! I own a home and my P.I.T.I. Mortgage is way cheaper than RENTING A SIMILAR PROPERTY.

[Michele1032]

Hi there what class was this?

[Manki1028]

In general, I'd suggest not to purchase a home unless you make at least 50% of that per year.  If purchasing a 200K home, make at least 100K.  Therefore, since you want a 1M home, you need to make 500K.  If you can't afford that, move somewhere that has a better cost of living 🙂 ... I'm able to follow this rule no problem.

[zyxelenator]

Love how people optimistic about the paying off all those cars/ student loans in just 5 years. Like everything will be perfect, you will never get any medical bill in that time, car will require 0$ maintenance? Emergency fund is a must. It has always been for me lately, as soon as I start trimming down that debt and save some money- some **bleep** hits a fan...

[Manki1028]

Here's from my personal experience:

1.) Been working since 15 years old, didn't go directly to college.  Saved 20K working retail / living with parents.  Went to community college to knock out as many classes that I could transfer to a 4 year.

2.) Started 4 year college at 21 (in 2005), purchased my first property at this time to live in while going to school for 55K with 11K down payment (2 bed rooms, 1.5 bath apartment - typical rent was ~700, mortgage was ~200.  Still worked while in college to pay living expenses.  Rented out one of the bedrooms for half the typical rent to another college student for 350 / month.

3.) Started career in 2009 near the college

4.) Sold first property for 60K, purchased a better one for 62K (foreclosure - double the sqft to around 1200 - open floor plan, duplex with 2 bedrooms, 2 full bath, a yard, and garage in 2011 at 27.

5.) Moved up in career over time

6.) Sold 2nd property for 92K (yes, a 30K increase in value).  Purchased another property for 200K with 40K down to start a family in 2017 at 33.  This property is a single family home 2100 sqft, 4 bedrooms, 2 bath, oversized garage, 0.5 acres of land fenced in with gigabit internet available to work from home (software developer / security analyst).  It needed about 25K of stuff to fill it.

Savings - Typically I follow the flex 30, fixed 50, saving 20 rule after 401K is taken out of pay.  Example: On $100, 6% to 401K to get full matching, leaves $94, then $94 is split to  $18.8 in savings to create free cash flow, $47 to pay fixed living expenses (mortgage, car, insurance, HOA, Taxes, Base Grocery, Internet (for me it's job related) - things you can't be without), $28.2 in flex spending - things you CAN be without (eating out, extra grocery items over what's needed to live, nexflix, hulu, TV, etc).  If you want to speed up savings, simply tighten down on flex.  Also, take your gross pay and multiply it by 6 to get your emergency fund value.  Build the emergency fund to this number, after that you can use the extra savings over that amount for investment (e.g. safe investments (ETF/Index) or purchasing a rental property or CD etc.. whatever you're comfortable with).  You could also use it to pay off your mortgage faster with principal payments or you could recast the mortgage to allow a larger cash flow ... many options to weigh.  Example if we are in a recession or housing crash - Use it to buy cheap homes or pay down mortgage.  If in a bull market, invest.  I knew some people that had the money sitting in the bank at the last housing crash and made 50K per house they purchased - (e.g. buying for 30K, doing nothing but waiting, and then selling for 80K) - you can rent them while you wait on the market to come back.

[lljohnson2015]

I would love to hear what you've did. My credit has been stuck at a 561. I desire to be debt free to purchase my home. Will you please advise?

[_D]

Your rent payment counts against you as debt,i.e. getting a credit card is NOT the way to boost your score. You can boost it to 630 if you go through bankruptcy but you must sacrifice to save money so look for an interest bearing checking (try your local credit union) and get paid to save money.