I made a lot of financial sacrifices in order to purchase my first single family home. With my first real estate purchase, not so much. My first purchase was a townhome that required only 3 percent down. I borrowed the money from my 401(k). With the second purchase with my husband, we agreed to put down 20 percent. According to a recent article by Market Watch that cited an ERA Real Estate survey, 60 percent of people would give up a honeymoon for a down payment. That’s just one of the things we did.
Delaying our honeymoon
My husband and I had a frugal wedding that cost only $500 because we wanted to be able to put 20 percent down on our new $183,000 construction home. We did eventually go on a cruise to Mexico as part of a work assignment. It didn’t cost us anything, but served as our delayed honeymoon. Sharing a car My husband and I shared a car for 1 year in order to save up for the down payment on our first home together. We also shared a home with my father-in-law, who happened to be a snowbird. Sharing meals at home, sharing transportation and sharing living space all taught us how to conserve, budget and live a life of frugality.
Working a second job
According to a Trulia survey cited by Market Watch, 37 percent of young people said they would work a second job in order to fund a down payment on a home. Homeownership was part of my lifelong dream. I took a variety of freelance gigs the year before we closed on our home purchase.
Using wedding gift checks
We asked friends and family to give money instead of wedding gifts so we could use the funds for our imminent new home purchase. According to the Trulia survey, 50 percent of millennials were willing to ask their relatives for down payment assistance. If people are going to give Christmas, birthday or wedding gifts anyway, it makes more sense to receive cash for the best gift of all: a home.
I’m glad we made sacrifices for a down payment. After we bought our home, the value went down rapidly. If we had not put down 20 percent, we would have been deeply underwater. It did not take as long for us to recover from the housing downturn. When interest rates hit 2.75 percent, we were able to refinance without worrying about paying the private mortgage insurance required for homes that didn’t have at least 20 percent equity.
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I Should Have Saved Cash
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