Posted on 05/05/2021 11:54:01 AM PDT by jroehl
I want to save up $20,000 in the next 4 years to buy a house. If my bank offers me a savings plan with an APR of 2.5% when I make monthly payments, how much will I need to save each month?
A down payment is only the tip of the iceberg for home ownership. https://www.doughroller.net/financial-planning/30-items-need-budget-buy-home/
Get in now. While the interest rates are low. Even if you don’t have a big enough down payment. If you can make the payments and the PMI, do it.
The values are going to increase and the interest rates are going to increase. After 3 or 4 years you can get rid of the PMI after you have 20% equity. If you wait until you have a big enough down payment you won’t be able to make the payments.
Screw the house. It’s a liability they can TAX.
Live in your car.
Buy Bitcoin and stay liquid.
Then in 40 years, turn it all into CASH
and put it all on RED, one spin.
What? You think wanking yourself by putting cash in a bank for years, with soon-to-be negative interest, that now holds you as just another creditor, behind first position claims is such a good idea?
Dude, you really need to smoke better weed.
All those houses look like Hitchcock movie sets..................
I stockpile cash and precious metals: brass & lead.
“Where can you buy a house for $20,000?”
Check every urban area and find the ones with a the moon on the door.
You could however get lucky. In county buildings across the US every selected day, they have auctions that include property. If the weather’s bad and the property after being looked at is not worth turning over by the pro’s, no one will bid. If there’s no minimum, you might get one cheap. Look for the advertising theyy supply for you to look at them. It’s going to be the Hearst Mansion, but you weren’t looking for that in that price range anyway.
If you can relocate:
https://www.apartmenttherapy.com/cheapest-states-to-buy-a-house-36672551
Good luck.
wy69
My sister bought a small house in St. Pete for $23K at auction. Sold it for $125K two years later. Updated the kitchen a bit. Painted the exterior and planted some flowers. Put one of those steel/aluminum one-car garages behind it. Made a ton of money.
$438 per month
I have to agree with poster “toast” at #43.
We have very low interest rates. Housing is already spiking in many markets driving up prices now. Private Mortgage Insurance will let you get in now and fixed rate in inflationary times with your income rising due to inflation alone protects you from rent inflation.
Disciplining yourself to save or to pay for PMI are all the same. Get in now and build equity. A rising market and the cost of a new appraisal in 30 months may let you get refinanced without the PMI in a short time if the market booms in your area.
100/week will get you there
Monopoly?
Using my trusty old HP12C, that’s exactly what I came up with. 396.61 a month. Cool.....I still know a little about FV, PMT, N, and i. ........
Your best bet would be to save $10,000 a month for 4 years then pay Cash for a House!
If you have to ask that question you should probably not be buying a house. Do your own due diligence.
_______________________________________
I was going to bust his chops for using the term “monthly payments” instead of monthly deposits.
But there was a time when you and I didn’t have a clue either.
“A thousand bucks is not piddling!
No, it’s not. But he’d have even more if he just threw the extra $20/month in savings. Not a huge leap between $397 and $417.”
Make it an even $450. Only $33 more ...
“Get in now. While the interest rates are low. Even if you don’t have a big enough down payment. If you can make the payments and the PMI, do it.”
I agree. We have had really low interest rates that are bound to rise.
Once you get the house continue that savings mentality and direct future savings towards retirement. You need to move towards saving 10-20% of your income towards retirement savings. That might seem challenging now but it will pay off later. Good luck.
Your best bet would be to save $10,000 a month for 4 years then pay Cash for a House!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Where I live you could save $10,000 a YEAR for 4 years and pay Cash for a House.
Granted not much of a house, but still....
It’s a dicey market to be giving advice like that in.
I own two homes and the price appreciation over the last year has been absurd. It’s simply not sustainable and if the CDC moratorium on rental evictions is truly overturned you will most likely see a large number of landlords trying to get out of the rental business and listing the homes. This should solve some of the inventory problem.
I also imagine that there will be some normalization with the materials supply chain issues over the next year or so and we will see housing starts increase.
And I’m sure that you are aware of what happens in the event the Fed does raise rates. Higher interest = less money that people can afford for the monthly mortgage payment and prices will have to adjust.
If the OP were my kid I would tell them to first eliminate all interest bearing debt and then to stick with the saving 400 a month plan. Even if they bear the brunt of inflation related depreciation in spending power they will still have options open to make an informed decision when the time comes. And the flexibility to change their minds.
Don’t pay any attention to the discouragement comments from the landlords.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.