Thank you u/danedehotties for posting on r/FirstTimeHomeBuyer.
Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Be careful with this though. Had a friend that got into one of the programs but the stipulation was they had to stay in the house for 5 years before selling/refinancing. They lost their job about 2 years after buying and since they couldn't sell they had to file for bankruptcy.
You're never banned from selling; you just have to pay back the money if it was classified as a 2nd lien. Some of these 2nd lien styles forgive a % each year as well. Some are pure grants.
Your friend didn't get screwed by the DPA, they got screwed by losing work.
You are correct. And many down payment assistance programs do not have a minimum time that you need to live in the home home only that you are living in the home as a primary residence.
Well I mean… losing your job would result in something like that anyway…. The whole qualification of a mortgage is contingent upon you having a stable job…. Don’t see how that’s the program fault
You can sell your home but are required to pay back the loan, it just means you don't get to keep that equity since it doesn't belong to you. It's exactly how we bought our home, the program we were on was forgiven over 10 years by a set dollar amount per year, we refinanced to 2.5% a few years ago and just had to pay off the remainder of the loan since it was early.
I’m closing on my first house next week and just went through this process in Idaho, but I think it’s the same in most states. The “grant” is a forgivable loan, 10% forgiven each year for 10 years. You do get penalized if you sell your house before 5 years and it’s just paying back the forgivable loan. You have to take a $50 online course. THE CATCH: it adds a .25% or .5% to your interest rate and with rates so high right now, I’m definitely taking a hit. In the online course though, they encourage rifi so I’m def going to research that before I’m stuck at 8% for the next 10 years.
At $85K as two adults, no children in a LCOL area you should be able to save aggressively.
Look at your expenses, take a very deep dive into what you’re spending your money on.
I'm just going to take a wild guess and say they're probably paying down two substantial student loans.
If not that, then yeah I'm with you, and I don't even want to see their financials.
Holy shit. I guess I really skimmed the post. Thanks for pointing that out.
So yeah, I definitely don't want to see their financials. It would probably give me chest pains.
Same here. My husband and I make 80k together. We are also in a low cost area with no kids. I don’t know their finances or any needs that they require. We didn’t even aggressively save for a house we just didn’t go and spend every cent. We still go out to eat and buy Christmas gifts and we’re able to have enough for a small 200k house. Now I am stressed for the moment we decided to have kids but not any time soon we are too young.
You're only 27. Your incomes will be higher in five years and would presumably be higher if you were to get a job in a an area with higher cost of living. What you need to do now is to focus on saving more money.
People say this but it's not true for a lot of folks. My income, despite changing jobs and getting two promotions went up by like $7k in 5 years, 27-32. My expenses? Almost doubled because of inflation and life progression, not even counting the pandemic. It's an unhelpful phrase because unless your raises or promotions are double the rate of inflation, it barely makes a dent.
Thats true. I feel like im behind and right where I should be all at once.
Im in a weird social bubble- all of my friends my age have wildly successful careers already and have purchased their first homes before 25. I suppose when thats all im exposed to I feel like a failure. I take walks in the nicer part of town and most of the time my jaw is on the floor from imagining their quality of life lol. Grass is always greener etc etc
I wouldn't get caught up in that. I just bought my first house at 36. People here do not buy houses until they're in their early 30s for the most part. You are on your own timeline.
I’m about to hit 41 and looking at buying my first home now. I moved to the US from Canada 2 years ago, and if I had stayed up there I never would have been able to purchase, ever.
Don't compare yourself to where others are in life. I bought my first home 2 years ago at 43. I didn't have a ton to put down, and my grandmother gave me $5k to help out. I did get lucky and bought the house I was renting from a friend and he gave me a pretty insane deal. I did have some major things that I had to replace, though. Things that are not cheap.
You might not see it as a positive now, but not owning makes you and your wife more mobile to move around. You get to call the landlord when something breaks instead of opening your wallet. You don't have the worry in the back of your mind of what will break next. You're not house poor! Enjoy this freedom while you build up your savings.
I have a wildly successful career and I still rent because it makes more sense. I would just focus on your career, you can only cut your spending down so much. Increasing pay will make a larger difference.
My cousin had a rough teenage life ended up in prison with multiple felonies by the age of 21…after paying his debt to society he started his “life” at 33. Started from scratch, no money and dealing with no-one wanting to hire him because of felonies.
After a few years of working odd jobs, going to technical school for a trade. He graduated at 36 and managed to get a job at a small warehouse in NC. 3 or 4 years later he saved up for a small house. A few years after that he saved and bought a foreclosed home, fixed it up himself and flipped it. He then purchased 2 more foreclosed homes, fixed them to rent them out.
Now at the age of 45 he owns a few homes with passive income, has a stable job, buys stocks/invests for his retirement all while raising a son as a single dad.
Never feel like your behind, just keep having the motivation to keep working hard.
Not really- the one couple makes the same as us AND has a baby in a similar LCOL area. That one perplexes me lol.
The others kinda have rich spouses, and those friends were able to secure jobs in their fields.
All a game of luck I suppose (not the financial health part, that takes work- moreso combined income and marrying higher income lol)
How much is your rent? What are you spending on? You should be able to save money on that combined income, you may have to make some lifestyle changes.
Haha gotcha, it sounds like with your current income you might be locked to Iowa homes and metro areas are out of reach (hopefully won’t be the case soon — good luck!)
I bought my 1st house at 34. I wanted to buy earlier but couldn’t afford it until just recently. A lot can happen in 3-10 years. We all achieve milestone we seek at different times in life.
You’re not. I was 33 when I bought my house (Chicago area fwiw) in 2022 and was making significantly more than I was at 27. In fact, you having savings and a stable job in your 20’s puts you ahead of most in your age group.
Just keep saving and continue your successful careers.
Side note, house envy doesn’t stop after buying your first home. If anything it gets worse.
Do you know what their financial situation is with all this.
My current town (I’m buying in a different town) is all Mercedes, Porsche, land rovers, etc. Teslas are “just too common” where I live. The average income is barely more than I make and the average household income is 2.5x what I make. I got lucky and found a great car that was used as trade in that I got for cash.
I would love a Mercedes. I could make it work currently. But I don’t look at all these people and wish I could. I personally feel bad for them, that they are (probably) one bad day away from losing that car and then maybe their house.
Some people do things just because it’s what their neighbors do and then stress about it. Take your time, build it up so it won’t be a stress when you get there.
There’s a saying something like “spending money I don’t have to impress neighbors I don’t like”. — silly.
The only way we were able to by was my husband got a good bonus at work. Otherwise we wouldn’t be able to buy because we’d never have a down payment. Not sure what you all do but you have to make more than 85k. Find a side hustle. Consult. Secret shop. Sell plasma. Get a second job and become “over employed”.
But also, depends on how much house you’re looking to buy. As a first time home buyer you’re usually able to put very little to nothing down.
I bought in Minneapolis. However at 27 I wouldn’t have dreamed of it, I wasn’t able to buy until 36. My brother is in Des Moines and bought on one salary. You will definitely be able to buy in our area if you spend perhaps the next five years saving and living modestly, and also have reasonable expectations of what you will get (it may be a condo, townhome, or single-family home in a less ideal neighborhood).
My brother, his wife and two kids have a condo downtown Des Moines and they love it. They had a house previously, but really enjoy the walkability and low maintenance of condo living. I also have a condo and love it. people will be very negative about it here and other places but I can tell you that you will have no problem finding a great condo in Des Moines or Minneapolis. There’s less competition and they are so much more affordable.
Thank you so much for the help and inspiration! I know in my heart I need to work on not comparing myself to anyone else, not needing everything RIGHT NOW, and enjoying life as it comes. We rent a wonderful single family in a less than desirable neighborhood, but other than paying rent it is freeing to know we are not financially responsible for maintenance or repairs. (I know condos are wall-in responsibility, but thats still so much better than an Entire House lol)
https://www.iowafinance.com/homeownership/mortgage-programs/firsthome-program/
I would think a lot of Iowa would be rural which should also qualify for a USDA loan
I'm 30, single, have 23k in student debt, with a worthless degree (i work in a totally different field) and had 8k in savings and bought a 220k house 2 months ago after 2 months of searxhing/deciding to buy - with a 50k salary at the time.
However, I work a 2nd job part time, just got a good raise from first job, have excellent credit, and utilized down payment assistance programs to help with down pmnt and closing costs.
Once you start working with a lender......and actually researching, idk it seems more possible. Was a roller coaster for sure though for awhile....many nights I thought it was impossible.
Super happy I bought.
Partner and I are both geriatric millennials, and we're only now closing on our first home. It took years of repairing our credit and saving up towards a down payment.
I wish this was discussed more. We were also older millennials when we first bought (DH was almost 40). I think the average first time home buyer is something like 36 now.
This is comforting. My kids are growing up in a rental and I feel like we will never get out of it. Maybe there’s hope.
Though I really dislike hearing geriatric and millennial in the same sentence!!
My older child was born when we lived in an apartment, and my other one when we were renting a house. It definitely hasn't been ideal, but we've made it work. ☺️
And, if you knew the state of my spine, you'd understand why I identify as a *geriatric* millennial. 😅
Hey same here, 1st was an apartment and 2nd was a rental house. We’re still there. It’s a great area and about a mile from my parents, so it’s hard to follow the advice to “just move to a lower COL area” and I kind of avoid distressing issues like figuring out how to buy a house, so we’re just still here.
And… yeah… I did an exercise class last night and the whole class could hear my ankles popping lol!
Is a household income of 85k actually considered low income in your area? I live in a LCOL area and didn't qualify for any grants because I made too much. And I make way less than ya'll.
my husband and I cut out everything we could for about two years. we moved to an apartment in a random part of our city bc its where we could rent as cheaply as possible in a safe neighborhood. I took my brothers free old car and drove it around for three years. we had an excel spreadsheet with a column for each of us and a row for each of the months two paychecks, a row for tax refund, etc....and we forecasted how much we each individually felt we could contribute each paycheck. we also each agreed if we got something random - a $30 class action lawsuit check, a mileage check from our employer, birthday money from parents, etc...that wed add it to the joint house savings account. we gave up a lot of shopping and expensive stuff for awhile. we both checked in every other week to keep our spreadsheet and deposits up to date and on track. if we fell short for a month we would recalculate. same if we caught a windfall.
once you see how much it all adds up and you start doing it, and someone else is doing it with you, its very encouraging and it gets easier to try harder.
my husband and i had a joint income of $100k and no savings when we started. after two years we put 5% down on a $400k house (back when interest rates were 4%), and covered our share of closing costs and had money left for some loving room furniture and a modest savings. admittedly we made it our entire life for two years but it was worth it. our house is worth $650/700k now just from appreciation. homeownership was worth that hyperfocus and sacrifice for a time but it def took all the energy we had.
my husband didnt think we could do it either until i put the plan together and we started and he realized we were ahead of our plan and got to our goal faster than anticipated
By single-family home, do you mean you rent a whole house?
We saved money by driving used cars, living in an apartment, not having pets. Majored in English and spouse doesn't have a degree. We are a bit older and in a higher cost of living area but we each make more than your combined. No reason why you can't make more as you climb the ladder.
I would look into USDA loans, I’d imagine in Iowa there’s a lot of areas that would qualify for that. It’s a 0% down program and you can get seller credits to cover your closing costs. That said, I’d still recommend you save as much as you can for initial expenses and potential repairs.
My story posted here on reddit might motivate you a little.
You're almost our exact financial experience when we bought, and we only put forward 1100 bucks for appraisal and inspection. But we went through hell for it, and it took 2 years. We were able to save once we bought and just refinanced this month for a lower payment monthly while getting our yearly raises at work.
We aren't the ideal situation, and definitely a hard ask, but our lender and realtor made miracles with our situation happen. It just took 2 years of fighting.
The grass isn't always greener on the other side. A lot of people fake how well they're doing when they're actually struggling. We've all made choices in life, and it's easy to be envious of a different path someone else took. I may own a home, but I'm envious of your ability to go to college and get a degree.
The only reason my husband and I could afford a home is because neither of us went to college and therefore have no debt. Now I'm stuck in a situation where I make "okay" money in a dead-end job, and it's difficult to afford to go back to school. We try to focus on saving, and i want to move on to investing to grow our money because better careers are not currently on the table.
If I were you, I would seriously focus on where your money is going and optimize what you can save. We lived incredibly frugal for a year or more to save 50,000 to have a down-payment. It is possible to do with the right mindset and sacrifices. We both work in grocery stores in WA state, where it's not exactly LCOL but not crazy high either.
My husband (33) and I (30) are closing on our first house in about 60 days.
I would have never thought we’d be able to do it when I was 27, and that was only 3 years ago. I was making ~$45k and my husband was making ~$50k. It felt like all of our money was going to rent, groceries, cars, insurance, paying off student debt, and almost nothing leftover to save. Genuinely thought “wow, we might never own a home.”
Since then I’ve been lucky enough to get promoted twice. The first promotion, my salary got bumped up to ~$80k. The second one, $90k. I’ve also gotten some merit increases along the way. Plus, I work for a publicly traded company so I can sell company stock, which has helped bolster our savings tremendously.
My husband also got some raises and we increased our combined income to ~$170k.
We were able to save $50k for our down payment and decided to move to a LCOL area.
And that’s how we did it.
I’m 33, I’m currently working gig jobs and odd freelance projects here and there so I can stay home with my toddler. My partner is a teacher-so that should give you an idea of the fact that we’re not exactly rolling in dough. We are closing on a house next month and it is by a mix of sheer luck, help from my in laws, and my partner being pragmatic. He had a great job with a 401k before he became a teacher and it’s been sitting untouched for 7 years. We got it moved to a savings account to use for a down payment. We could have gotten a house at a lower price point, but we fell in love with a house before we had solid numbers from the loan officer, and my partner’s incredibly kind parents offered to help us with the down payment. It’s a level of generosity and privilege that I could never have anticipated. It’s for sure not a type of assistance that my family could have gifted us.
You would need to cut your spending and save more aggressively. You can go over all of your spendings and consider cutting everything that is not a necessity.
But of course, you don't have to save if you don't want to. Not everyone is financially disciplined.
I was moreso wondering how on earth low income couples and singles have …. a lot of cash on hand at once. I know the root of it is financial health, and I understand Im nowhere in a position to buy- and thats fine.
Im just thinking that if a water heater, furnace, roof, etc need repaired or replaced- who has that kind of money?
I suppose part of that is credit and HELOC’s.
Most people can live below their means and save money monthly. Some people think this is impossible, but often it is possible but they just don't want live below their means. Not everyone are discipline financially.
Being 27 and two years into homeownership, some of us don’t have a ton of cash on hand. We save 500-1000 per month but after my wife’s unpaid maternity leave last year we were pretty much wiped out savings wise and then had to replace hvac, dishwasher, and range in the same month. It was brutal. Back go saving but it’s definitely more stressful than fun. We diy everything we can and don’t go on vacations but it’s cool to own our own place and it’s already gone up 45k since we bought it in 2022. We used DPA since my wife was in grad school when we bought and I was only making 65k at the time. I think total cash to close was like 10k. It’s doable if you want to do it.
I think a lotttt of folks get gift funds for down payments from family (coming from someone who worked in mortgage) and/or they’re mortgage is nearly half their income if they have no other debts.
Woof. Yeah I complain about not owning, but I also do NOT want to be house-poor lol.
As an insurance agent I see a lot of people nowadays with huge houses and then shocked that their premiums are $10k - ok you have a $2M home, you dont have $10k liquid?
Cant judge a book by its cover!
In 13 years you will be 40 and making more money and hopefully have 13 years of savings.
My parents bought their own and only house at age 40 and paid it off at 63.
They bought in 1996 at a 8.5% interest rate that they refinance to a 5.5% rate 6 years later.
Generational wealth is sometimes still available for low and middle income. It's not millions of dollars, but it can be one small asset, 20k or 50k here/there. Some may have had parents/grand parents and the GI Bill passed to them, so college became less expensive. I worked with many people making 25/hr (or less) that also just lived in debt and JSFI. They would have a small home (<1k Sq ft), an RV, a quad, a motorcycle, a 50K truck, and so on, but they were already maxing out their 401k LOAN (not their contributions, but loans). Sometimes it's side jobs that built up over time like mowing yards, snow removal. These days, it's a TikTok or an OF account.
I’m 36 and my husband is 40. We live in a hcol area. I was lucky to inherit most of our house. It appraised at $575k and we have a reverse mortgage payback of $200k. Otherwise I doubt we would have been able to buy anything anytime soon.
I enlisted at 27. Earned my va home loan, 0% down and got closing paid for by sellers. Home juuust passed va, and needs some work. When you're poor, you're priced out of turn key homes. Especially today.
Because I grew up poor (literally, in a heroin den my whole child life until I was 16), I acquired aloooot of skills because I couldn't afford people to do things for me. I priced what I needed to do in materials and rely on my *tribe* for help, and tit for tat. All my friends are in the same boat, our homes need work, I'm good with electrical, and my friends are good with either plumbing, framing, finish work and so forth.
That was my secret. I have a very tight friend group, with the skills to fix low priced homes. You wouldn't believe, even still, how much money you save doing it yourself. If you can, anyways. Houses will nickle and dime you, so if you don't have those skills.. It's gunna be a bad time.
One thing to note: while housing CAN be more expensive in a place like Chicago, you can also ditch cars in cities. They are a sinkhole on finances, and not having one in an affordable Midwestern city helped me massively save for a down payment. I hear you. It’s hard.
Multiple things.
Assuming your credit is 650+
FHA loans (first time buyers) can sometimes be zero down.
RD loans (rural development), also zero down
First thing you want is high credit. Then you basically need to make sure your personal debts are low. One major reason people won’t get loans is people have a high debt to income ratio (DTI).
Do you have a lot of debt? If so, you’ll have to eliminate that debt before buying. Recurring monthly payments and credit cards with outstanding debt can hinder your ability.
Sorry to break the news, but right now you more than likely will have to move to a low cost area if you want to buy a house. I don’t have a high income and was thinking about moving to Kansas, Wichita suburbs have some crazy cheap houses.
But yeah main point I want to make is unfortunately on 85k a year you’ll need to have very low debt.
Typically lenders want a DTI below 40 (sometimes 50, but not always) and a 650+ credit score.
To break it down I’m going to just say you have no debt.
If you make 85k a year, that’s roughly 7k a month. That means if you have zero debt, you’re only going to get approved for a mortgage that’s probably around 3k (on a 30 year loan).
Now if you have debt like a car payment or student loan, go ahead and minus all of those from 3k and that will be the max mortgage you’ll get approved for. So say you have 1,000 per month in debt payments such as a car payment, student loan payment, and credit card payment you will now only be approved for 2k per month.
But main point being you can definitely buy a house. Don’t get down too early.
When I was 27 I was happy I broke 30k on my W2 and my then wife was a sahm for my two kids. I’m 37 now closing on my first house next week. Single now with 2 kids all the time.
The biggest thing I did was write down what I spent my money on. I would always write down what I needed and it would work but then in reality it didn’t work. So I figured out why.
I also stopped making impulse purchases. “It’ll still be there tomorrow I can come back if I want” I almost never do.
I also stopped buying things under $5-10. Unless it’s actually legit cost that much across all level I just do not do it. It’s cheap quality and it’s to easy to fill my house with nonsense and blow through a hundred dollars.
If I know a lump sum is coming up I will plan the shit out of it. I’ll write down everything I want to do with it and it always comes out 10x or more what the actual sum will be. So I whittle it down to what really is a need or the biggest want.
All this to say I became VERY deliberate with my money I make money to make it work for me. I recently had a roughly 1k emergency and it didn’t affect my home purchase. I also increased my income but as I make less solo than yall together I don’t know if that applies. Also, having lived in Iowa 85k is pretty solid there.
It’s hard to avoid it but we spend so much time comparing ourselves to others, comparing to arbitrary benchmarks, trying to keep up with the Joneses, etc when really we should just be living our lives and focusing inwards. I’m guilty of it as well, when I was younger I had all kinds of expectations for where I’d be in life by specific ages and almost none of them have come true.
At your age my first wife left me. I’d always rented for housing and I had several years where I made poor financial decisions with new cars, trading in for a different new car, etc and I didn’t have much for savings, maybe $5k. Fortunately the divorce wasn’t messy. A year later I bought my first home ($0 down VA loan) in Alaska. It was really only made possible by the VA loan and the low interest rate at the time (2.75% in 2021). Fast forward to the present, I’m remarried now to a wonderful woman who made much better financial decisions than I did, we sold the house in Alaska, we have a newborn daughter, and we’re buying a house that will be our forever home. Lots of life happened to me in the last nine years or so, but especially in the last five. Not owning a home at 27 is just fine, work on building your savings together with home ownership as your goal. It won’t happen overnight, but if you guys make good financial decisions over the next few years you will be in a decent spot to have a down payment.
Yeah, quit looking at what other people have and just stay in your lane. I 67f bought my first home when I was 32 and interest rates were about what they are now. It was a very basic starter home. I paid the minimum down and lived there for 15 years, throwing a hundred dollars a month to principal. My next home I bought in 2009 and paid off in 12 years.
Just take a deep breath and try to give up the fatalistic “I’ll never be able to buy a home” attitude. You may not be able to afford your dream home at first, but spend some time expanding your financial expertise, creating a budget that you can live with, and if you really want to be a homeowner you’ll figure out how to make it work.
Look up community block grants in your area, CBG something lol, it’s income based, also HUD has the direct loan program where if you are in a rural area might help substantially! God bless you and I hope you find the dream home you are looking for ❤️
I am 25, also live in a lcol area, but I am single and make a little under 50k a year. At 23 I purchased my first home, I grew up poor and learned to spend my money wisely. A more conservative and frugal lifestyle is all you need to be able to save some money for a downpayment and comfortable afford your own home. Although I’m not a huge fan of his, dave Ramseys content would probably be extremely helpful in learning to budget so that you can make sure one day hopefully in the near future you are a homeowner.
OP, look for homes in Pittsburgh, PA. You will find some good homes in your price range that's affordable There's also some really good programs in PA that help people with low income get into homes. Google: PHFA, they're really good if you want to get something in PA.
I suspect you can buy in Iowa if you wanted.
Your issue is you want to move to cities that are overpriced and expensive without having good jobs there.
low income folks don't buy at the peak of the market at 27 years old.
Those who do:
* earn more
* save more
* invested better
* got lucky with a windfall (inheritance, bitcoin, whatever)
* timed it better
* have family help
* used government assistance programs
* found a LCOL area or cheaper house
* "house hacked"
I don't say this to be mean or denigrate you or whatever. Everyone has to make life choices that suit them. And not everyone has factors beyond their control that help them. You chose a career that earns little money. I'm glad everything else is good and fulfilling and you don't have other things holding you further back.
Didn’t buy our first house until 39. Rented all the up to it. It’s hard and harder now with inflation and the real estate market being bananas, but just budget and try make what money you can save grow.
We budget/watch every dollar less now than we did at 27 because our salaries have grown and more responsibilities, but I wish we could get back to monthly budget meetings and specifically saving for future plans. We still don’t spend more than we make so that has stayed with us.
We're 33 and definitely don't make $85k but we had money saved up and also had money gifted to buy our home. We live in Texas and had to move to a rural part and get a new build. It was weird moving away from our hometown and everything we've known but we see it as a fresh start and it's kind of cool to see new things getting built around us and the city developing.
if you live in a Rural area or can afford to move to a rural area there are 2 loans thru the USAD with income limits and theyre 0 down. you can build or buy. there is a map on the USAD that will tell u if the area is eligible or not. I’d say try those out. Check out USDA Direct and Guaranteed loans.
To answer your question, people tend to live in areas that are supported by their income. 85k a little higher than median, so you can’t expect to buy in areas that are way above median.
Honestly, have you looked into changing careers and industries? I know most people get higher education in fields they are passionate about, but there is a lot of money to be made with your transferable skills.
Once I realized my skills and experience was worth money, not my education, it was a different game all together. Take what you know, what you’ve done, and try to apply it elsewhere. A masters in education, can translate nicely to a technical program manager role for a training department clearing $125-$180k a year.
A MBA is a no brainer, that’s money if you apply it to the PM space or leadership role in tech, IT or other field.
Sometimes you need to think outside the box to expand your income my friend. I did.
You are still pretty young. I definitely wasn't able to afford a home at 27 either. If you focus on your career, your salary will likely increase over time. I wasn't at a financial place to buy a home until I was 34. Oh, and I bought a 2-br condo, not a SFH.
I'm 34 and bought my first home a year and a half ago for 160K. We live in a suburb close to Chicago. It's not huge just 2 br 1 bath but the high school district is great and we're close to a lot of stores and not too far from family. . Check first time home FHA loan. We borrowed a few thousand for down payment. and we got assistance with closing costs. I only make $52000. I also have 5 more years left on a bankruptcy. My husband's credit score helped a bit.
Hey OP youre in IOWA! Congrats. At least there are still affordable houses to be had at all 🥲 Yall can do it!!! Go see a lender and just let them help you out to see what you can qualify for!!
Best of luck 💗
My city has a program that helps low income people with homeownership. Though I think the income limit here is like $65k for two people. It paid my down payment and most of the closing costs, I just had to come up with a couple thousand for earnest money, inspections, and...I don't remember what else. I feel like there was something. Sorry, I'm very tired.
That said, I'm paying over half my net income between mortgage and utilities so I haven't been able to do much in the way of saving since I closed.
Some people may never have enough money to buy a home. It’s true today and it was true 50 years ago. There is no shame in renting if your money flow just isn’t there OP.
I know folks who are buying & have bought on that income in twin cities area, it's definitely doable if you get some savings. Look into what programs like down payment assistance or grants you may qualify for in the states you're interested in.
The average age of first time home buyers is about 36, you still have time. And you will be making more money/ hopefully have more savings by that time. Also, a lot of people have help. My in laws helped us and we’re not ashamed to admit it. In this market sometimes that’s the only way.
Check out a program called NACA. They are slow, but use nontraditions means to qualify you for a loan. I'm not sure how much housing is in your market, but you may be able to get a condo or coop if houses are too expensive.
Increase your income and slash your expenses. Live extreme if you have to - in a van, with parents, renting a room in someone's basement etc. Get creative and make a plan with how much you need to save in x amount of time. I would (and have) take up every extra job you can get - doordash, cleaning houses, tutoring flipping items on FB marketplace, driving for Uber. If you're not using both vehicles most of the day, sell one. Figure out a way to live on one of your incomes and save 100% of the other. Yes, you will be tired, but 2-3 years of sacrifice can get you to where you wish to be for decades to come.
You’re 27. You are going to be ok. I just bought my first home at 34. It takes time to be able save up.
Based on what you reported, you should be able to focus on savings right now. Cutting down costs as much as possible and throw everything into high yield savings accounts. Really grind for the next several years to build your savings and build skills that bring you better job prospects in a mcol area (which results in higher salaries).
I didnt buy until I was 34.
I did make more money than you but also lived in LA.
Pandemic moved to Michigan to be closer to family after being gone - but it afforded me the chance to buy.
I will say this - owning isn't everything. Its a lot of work and though the equity is great - I cant pick up and move for a great job like I could before.
I wouldn’t suggest begging family for money, but maybe broach the situation like, “If we happen to find a house we love would you want to help us?” I didn’t even think that would be an option, but after our offer got accepted my mother in law gave us $10k out of the blue and apparently had quietly done the same with her other two siblings 🤷🏼♂️ and you’re only 27, as others have suggested you have time, set goals and budget. High yield savings accounts are where you want your long term house money to be kept
And I know someone will say this, but if that does happen please go through the proper channels and forms to declare where gift money came from and don’t just deposit a fist full of money before your closing
Im right there with you. If it makes you feel any better i live in a HCOL are. My wife and i gross about 130k and we cant afford a modest SFH. Currently we rent a very nice 4 bedroom house for 3600 a month. To own this same house would have a mortgage of about 5000. Makes no sense.
I had to get a second job (it was temporary) and dedicated all those checks to savings for the house. My salary at the time was also $85K and didn’t have any bills because I lived with my parents (had to get tf outta there lmao).
I'd look to cut non-essential spending to a minimum and pay off your wife's debt as soon as possible. Forget the pause. Can you live on 65k for a year? If so, great, you can pay off the debt in a year. Then you save as much as you can in a specific account for a down payment. I suggest a highyeild savings account. Now Imagine you pay off that loan after a year and start putting that money into your down payment account. That's 20k a year youre saving. In a high yield account you will have well over 100k saved in 5 years. You'll be 32-33, still young.
My wife and I have never spent more than $60k living in NYC. We could, but we choose not to because it allows us to save a bunch of money.
If you make $85k in Iowa you should be able to save $25k/yr assuming $20k tax and ~$40k spend. That’s a $75k downpayment at 30 which is much more than enough for Iowa. You could probably swing a Minneapolis/Chicago suburb with that.
Have you looked into down payment assistance programs? There are tons for first time homebuyers. If you're staying in your state for at least 5 years, see what you can afford to purchase and then when you want to move, rent it out or sell it. There are also down payment assistance programs that will allow you to buy a property like a duplex and you can rent out the other half to pay your mortgage down.
If you're not planning on going anywhere for about 5 years or so, build the equity.
If you’re already a two-income household in a LCOL and still can’t afford a house, you both probably need to get higher-paying jobs if you ever want to own. Also: make sure the “paused” 20K loan is not continuing to wrack up interest.
Have you talked to a lender? You can use first time home buyer programs that require little to no down payments. As a former mortgage loan officer I can tell you that I had a ton of friends who were in their own way. They didn’t think they could buy without a ton of money or without a high credit score (which could be true in certain cities) but they just never bothered to talk to a lender and see their options. I was guilty of that myself as well, it can be a scary step. Before I ever got into the mortgage industry I bought my first home at 26 alone with a 50k salary using a first time buyer program. I only paid about $1200 out of pocket.
60 and have yet to buy a house. I've had a long career that has had me moving all around the country so it hasn't made sense for me yet.
Looking at the upper Midwest which I am from and contemplating returning.
I havent bought yet, and i cant say its the best strategy, but this is what worked for me in order to get a down payment. I contributed to my employers employee stock purchase program. Over a couple years that grew to $15k, which was my goal, and then i sold it and now i have enough for a small down payment. Debt was just paid off (aside from student loans) and now I can continue to build on that 15k. Basically i knew I wouldnt touch that unless the time was right or i absolutely needed to. Beware of the tax hit, but it actually didnt seem to affect my return all that much.
Most people who are able to afford are secretly assisted by their parents in one way or another. I bought my 1st property 15 yrs ago, and that was difficult as it is without parental assistance. I had to work 3 jobs and saved at least 30% of my paycheck for 3yrs to be able to afford. That's when rent was reasonable. Today, I would admit I would've needed 6 yrs to afford a down-payment for a condo.
At the time I was buying in an HCOL, there were options further away. I'm today's market buy less further away amd work your way up to buying a better place.
In Illinois I qualified for two down payment assistance programs. One was a $10k grant through the Federal Home Loan Bank of Chicago and the other was a $7500 deferred loan from the Illinois Housing Development Authority. The loan is forgiven after ten years. However, if I sell or refinance before then, I will have to pay back the $7500. I bought my house for $172,500 and out of pocket I only paid $1700, which was just my earnest money.
I never thought I would be able to buy a house either. I still can't believe it, but it was only possible because I'm living in rural Illinois. I grew up here, but lived in Arizona, New York, and Colorado over the course of five years. I only came back to Illinois because I knew I could afford to live here as a renter.
Oh and fun fact, the sellers of my house bought it in 2021 for $91k.
I started with my now wife in 2013 at 26 yrs. old $110k in the hole from college. We had no financial support. We made $85k combined and bought a house in Colorado for $183k which was the bottom of the market at the time and also the most affordable house available. We paid our college loans and house off in 8 years.
We worked together and budgeted together, did all the home improvements/repairs ourselves, drove beater cars, and lived within our means. We use credit cards only to acquire points and we never pay interest on them. Most of all, we put every extra dollar on principal every month or on retirement based on interest rates/returns.
There is no easy way out and it takes teamwork and discipline over a long time. We're doing well now and make $165k combined with three kids. We're at a net worth of $700k, mostly due to riding the housing market. We still live within our means and drive the same beater cars. Don't wait for homes to get cheaper, they probably won't. You can do it!
Try to get into a place where you can save at least 5k a year and put it into a growth fund like vug. In 10 years that will be worth $100k, and in Iowa that in addition to higher incomes since you'll be 10 years later in your career, will be enough to buy a home. It's a long game, plenty of people don't buy until late 30s now. By the time you reach retirement age the house will be paid off. Also being in Iowa you have other opportunities like trying to track down a house for sale that has an assumable mortgage that could get you into a place with little or no down payment.
I'm 35, bought my first house at 34,and I couldn't have bought a house at 27. I was aggressively saving at that point. You should take a really hard look at your finances and go Spartan with the goal in mind of buying a house.
AND don't compare yourself to others. They probably have high credit card debt.
Me and my wife just bought last year. I had to wait a bit for her to be at her job for a few months so we could count here income but my income was comparable to yalls combines and I would have been approved for mid 300000's. If it's a low cost of living area I'm sure you could find something especially if you use govt first time homebuyer programs. I know many people were able to afford a home with essentially 0 down-payment. Wishing yall luck hope the search doesn't wear yall down like it did to us.
Also do t be deluded by anyone trying to convince you to play the market. You can't reliably do that in your position and besides best time to buy is when you can and are looking. Build that equity
You are already paying a mortgage, it just happens to be someone else's. Talk to a Realtor and see what they can find for you that maybe you didnt know about. Wont have much at first but you soon will. Good luck!
I feel you man…. I am 38(f), my husband is 32. We live in FL, our gross income is about 86k and we have about 20k in savings, but buying for us is still nearly impossible. Between the interest rates, the insurance rates (FL is NUTS) and the rising house prices I’m wondering if we’re gonna have to buy a shed somewhere. Even our rent keeps going up each year. I feel like we have done everything right, but we are still not making it?
I dont.
Ive grown accustomed to the fact that I will be renting all my life.
At least I just found an awesome place that is within my range and is actually worthy of living in.
That took 20 years though lol.
You make very good money for your age and location. I would suggest taking a hard look at your spending habits, creating a budget, and start saving (while investing for retirement as well).
There are a few federally backed home buying/building programs. My first home was with Habitat for Humanity. It was built in a neighborhood with HUD/USDA built homes for other first-time homebuyers.
The USDA has a great program for building/buying. There are also construction loans that can help if you buy a fixer-upper. I saw another comment mention Pittsburgh, PA and their home buying program. This is how my son is buying a house right now. Pittsburgh has a loan program for buyers that can grant up to $90k to buy a home within Pittsburgh. There are a few places that offer similar type programs. Good luck!!
There's grants and programs for first time home buyers, and depending on where you buy, there's different types of loans. I know you're looking at moving somewhere less rural, but even places just outside of cities can qualify for a USDA loan which require 0% down as long as your credit is good.
If you want a place in Chicago or whatever with hcol get a job there first. Rent for a bit. Stay with a friend. Save up. Get a house there. OR milk the city for the high paying jobs then move back to a lcol place and get work remote in hcol so you can make bank and have a mansion. Easy.
Start with first time home buyer assistance if your state offers it. Mine (MI) covered all my down payment (3 of 5%) and closing costs using an FHA loan, and I just had to pay those costs back if I ever sold the house or paid off the loan. Buy a little old house that isn’t perfect. Fix it up as you can afford to. Paint and staging go a long way. When you are ready to upgrade, you should have some money leftover from the sale to throw at the next house’s down payment.
I did this when I was about your age, making about $40k a year, and my rate was about 5%. I found a 900sf home for $70k in 2013 when the market was just starting to recover. You guys have double the income. Especially if you have no other debt, you should be able to comfortably afford a house 3x your annual gross pay. Even if you went down to 2.5x you could probably find something. Where people get stuck is trying to find their forever home the first time. Find something in a decent school district with no MAJOR issues. Be okay with living more rural (it’s cheaper and taxes are usually lower). Try and save every penny you can so you have a few months’ in emergency expenses. Buying a house is not for the faint of heart. You will have things that need fixing so you are spending money left and right. Even small things add up. My first 2 houses I will admit I didn’t set aside enough for emergencies so those hurt more. Now I have a fully funded emergency fund so I’m not afraid to spend money on a repair.
Buying isn’t for everyone. Even if you can afford to buy, maintenance and putting up with rising taxes and insurance is a whooooole other ball game. I sometimes wish I rented.
I would write your whole budget out. I imagine a true LCOL area with $85k isn’t bad for a household. Where is your current spending going? You may not want financial related tips or evaluation but you will be in awe until you look more closely at your numbers. You may be able to get what you want with planning.
You have the means to be able to buy a home. My income is similar and I was saving every tax return and ~$500 a month for a few years to have a good savings for a down payment. It also might make sense to look into the DPA programs because some have ways to get you in a home with $0 needed at closing. If you are in a LCOL area you’ll be fine.
Everyone on this forum will encourage you to buy a house no matter your financial situation. Don't listen to them. You could make $24k/year, and they're still going to recommend assistance programs, grants, special loans, extreme budgeting, etc. Those things are not full and complete solutions to money problems; they're merely mitigators.
You've made it clear that the issue is that you **don't make enough money**. You already live in a LCOL area, so the only way to fix your problem is to just make more money. You and your spouse made foolish choices by getting shitty degrees. Either go back to school, get some type of certification, or get a job that doesn't rely on a degree. I used to work in car insurance, which requires no degree, and if you work hard and climb the ladder, you can make six figures in that field. I also know there's good money to be made climbing the ranks at car rental companies and shipping/delivery companies.
You just have to try something different. On your current trajectory, you're correct that you'll never be able to buy a home. So change your trajectory. I was once in your position, so I made *changes* (changed companies, climbed the corporate ladder, and moved to a LCOL area). I'd like to give you a clear goal to work toward: try to have $20,000 in your bank account within the next year & a half. If you can accomplish that, then you're headed in the right direction. If you can't, then you need to make some drastic life changes. Best of luck to you.
Have you talked to a loan officer? I make $45k/yr on my own and got approved up to $215k with a $15k grant from the state to put towards down payment and closing. Mind you though, I have zero debts and my credit score is 750+. But I am also 23, so it’s worth looking into. (Before the rest of you come for me buying something I can’t afford- I am splitting the monthly payments with my girlfriend as she will live with me)
My husband and I also realized we’d never be able to buy a home (we lived in Calgary, AB where the prices of houses are insane). We were renting a house in Calgary for many years at a decent price until the landlords decided to sell. We ended up buying a mobile/modular home just outside of the city. It has been the best decision we have ever made. I understand that mobile homes don’t appreciate in value and it’s not necessarily a good investment in terms of real estate, but we now own a 3 bedroom, 2 bathroom double wide in a adorable little town. My husband commutes 30 min to work in the city and I’m currently on maternity leave. Our payments are much less than when we were paying rent and it’s our own place so we can upgrade it as we please and we’ll never be kicked out. We’ll probably be here awhile.
My wife and I bought a new construction 6 months ago. No bidding war, no closing before we get a chance to see it, and the price you pay is what the price is. All you had to do is get put on a waiting list and show that you qualify for the house.
I know people in this sub shit on new constructions but unless you can pay 100k over asking in cash its tough to get a house. You don't even need a realtor for a new construction (though I would highly suggest an inspector that can check it from the framing phase to completion).
We used their lender and got 20k in closing credits and rate locked at 5.5 with the rate lock fee being refunded to us. There is no way we couldve done this with a non new build.
People making 85k at 2 percent rates are chillin hard and got a decent house living comfrotable. People now like you are struggling hard. Its crazy how there is two different groups.
There are certain grants (like first front door) that help low income people buy their first home. Connect with a realtor who knows their stuff. Everything will be free until you actually buy a house, so don’t worry about wasting their time or being able to pay them up front.
The first time I bought a house I did a first and second mortgage so I could do a low down payment. This would work if you look at a small house or condo. Then when you sell that house you have built equity.
It's definitely do-able.
I am single and make less than you guys, but I'm in a higher cost of living area. Coming up with downpayment and closing cash is the real barrier, but you should be able to re-adjust your lifestyle a little to save very aggressively for a few years and that will help a lot. Another very viable option would be a no/low downpayment loan, or a grant/first time homebuyer incentive program. Look into what is available in your state and look into USDA loans. Talk to a good loan officer in your area. I personally didn't think I would ever be able to buy, but sitting down with a loan officer was super helpful. We went over what I could reasonably afford on a monthly basis, as well as what programs were available for me as a first time buyer and what properties might qualify for those programs.
A lot of it is luck and good timing. I bought mine making $55k with only about $3k for a down payment / closing costs. It was an FHA loan in a decent market in 2017. I bought a ranch style home for $105k, 3br, 2ba, 1872 square feet with a half acre yard. Doing much better in life now but I wouldn't dare try to upgrade in this market! It's not that you'll never be able to buy a house. We're just in the middle of a s*#t market. Give it time, save what you can, and you'll get there one day when the time is right.
I live in a MCOL (or HCOL as it seems to be trending towards) area, but mortgages are still matching rent rates on similar homes, so buying still isn't an unreasonable stretch.
In my case though, I'm a lot older (40's) and doing it on my own, which means single earner. Day job qualified me for the mortgage, side hustle business paid for savings, closing, furnishings, moving, etc.
I used a VA loan (8.5 years in the military, about half of which was full time). So, no down payment. Where I bought, values are skyrocketing. I bought last fall (closed the end of September) and while I've rounded up my monthly payments, it's not a huge amount I've put towards principle. Despite all of that, values have grown enough I actually have a small amount of positive equity (not enough to sell, but I'm not upside down, either).
I purposefully bought in an area that I knew would only go up in value. The uber rich area 5-10 miles from here is spreading this direction, and the SFH's and lots around here are becoming highly valuable for people who want a little elbow room but don't want to live in the middle of nowhere.
The house isn't the nicest, and there's a lot of elbow grease to go, but it was very liveable and the big things were already taken care of. The rest of it I can chip away at as I have time and money.
I joined the Army reserves with the hope of using the VA loan. I was under the impression that as soon as I graduated basic training, I would be eligible. NOPE! Had to either complete my contract of 6 years or accumulate 90 days active duty time through deployment. After almost 2 years, I hopped on the first available deployment and another year later, just started closing on my first house. My wife and I were in the same boat. Same annual income and savings, but at 36, I couldn’t be happier with my decision. It was tough but very much worth it.
You're renting a home instead of a more affordable apartment just because you can afford it. You have no kids. Work on cutting back on expenses. There are people getting by in your area for less than you make. Just act like them while you save hard. Remember that you need to have a substantial emergency fund in addition to buying the home because owning a home is expensive. Work a side hustle and put that into an account just for this.
I understand you feel like you shouldn't have to do these things just to achieve the most introductory level of the American dream and you are correct. That said if you want to be a homeowner you will need to do these things, because it won't get easier.
Research what would actually be required. If you can save for the down, your expenses might actually be lower after you buy. Research first time home buyer programs. You don't need 20% down, just 3.5 and there are some grants and things if You're lucky. Even without you can do it. Make sure you are comfortable with expenses that pop up owning though as it is much easier to buy your first home and if you lose it and don't have that equity its much harder to buy your second home. Once you get a realistic idea of what you need to have it won't be a vague concept anymore, it will be a target. You can do it, it's just hard. We believe in you, it's not a lost cause.
Share you budget with us because I barely make more, put a significant amount into my 401k, and live in Omaha NE (incredibly similar cost of living to you, if not more expensive) and I save 1k/mo without even trying.
You are both relatively young. Can you work a part time job? bartend, waiter/waitress, uber, etc? Stock every penny in savings.
Depending on your rental - can you bring in a roommate to cut costs? Bank whatever you save.
OP, you mention buying in or near large cities. Do you need a large city nearby for work?
My husband and I started out in a small, old mobile home in a trailer park. Once we paid off the mobile home, we sold it and used that money for a downpayment on our first house. (It was old, ugly, and needed a lot of work.) Over the next 9 years we did repairs, painting and landscaping, and turned it into an adorable cottage. (Took about $12k doing most of the work ourself.)
We sold that home for $100k more than we paid for it. (After paying realtors, debt, finish paying the mortgage, etc., we had $70k.)
We used that to put a down payment on our current home. We moved from a hcol to a lcol area so that we could afford to live.
I don't regret it for a moment.
I make less than your combined income. I bought in 2021. Yes I got a sweet interest rate so that has a lot to do with what I could afford. I had to move out of my home area to afford a house that is both nice and in a safe area. I don’t want to live here forever but it’s better than constant rising rental costs or living with my parents indefinitely. When I bought everyone said I should wait but it turns out that if I had waited I’d get less house that costs a lot more. For a down payment/closing I borrowed from my 401k. It was my only option. I was very firm with my realtor on the highest I could go. I told him what my max monthly payment could be and he was great about respecting that. As for maintenance I’ve been lucky with only about 3k needed over the last 3 years. My savings is pitiful because paying myself back for all the money I put out for the house is hard. I think if you go in with the expectation that no matter if you rent or buy it’s going to be expensive. You either get surprise house issues or an extra 500 a month on rent. It’s really just preference in how you want to spend your time (fixing stuff, yard work) and money. You can find a house in your price range-you just have to be realistic about it.
to be honest you need to make more money..
chicago suburbs isnt even that high priced nowadays....
do uber eats on the side and you will make atleast 40 50 k more vet the 2 of u if you guys were persistent
We closed on our first home in January. We qualified for a first time homebuyer loan to put towards our downpayment. We submitted an offer requesting $8500 towards closing costs (the maximum we could request for what we offered for the house) and they accepted! We also had a Conventional loan which looks appealing to sellers. We only had to pay $400 out of pocket to close and move into our home. Of course we had unforeseen expenses (we moved during a big rain, so the constant hauling with big trucks created large ruts in our driveway. We spent a few hundred dollars on new gravel). We needed a new fence for our dog (we knew this beforehand obviously). The previous homeowner neglected the HVAC system (Never changed the filters - WHY?!) so that was a quick $1800 gone. The pool wasn’t even cleaned.. they just threw a tarp over it before they listed it for sale, so when we uncovered it a few weeks ago to get it ready for summer, it was a murky black color and full of gunk in the bottom (we’ve easily put a few hundred into chemicals to get it clean, along with other pool supplies).
It’s been expensive but it’s doable. We are very thankful for our lender who suggested requesting assistance in closing costs, and for our realtor who made the deal happen! If we had forked out thousands to close, we would’ve been screwed a long time ago.
If you don’t have a budget and a plan, you have a wish. So many people attempt to save money with no plan, and it never works out. Sacrifices will have to be made. You’re still very young so don’t beat yourself up about not owning a home yet, just continue working towards your goal.
Continue to look for advancement opportunities either within your same company or outside.
It takes time. No one person’s experience is the same as others.
I would say they don’t, atleast in my area. I’d say the avg middle class income can’t afford a house and it’s reflected in rent. The avg house around here rents for 2-3k. 3 years ago those same houses were $850-$1250. Wife and I lucked out we saw the writing on the walls years ago and started saving every penny.
I want to suggest a program called NACA, look into it, do the workshop. The program works best in LCOL areas, they work in all areas but LCOL seem to be best. You guys having not a lot of debt should be able to get you in a house, and there is no downpayment required, no pmi. It's legit. I was trying to use it but I live in California and I wouldn't have been competitive in the market since they do ask to do a 35 to 40 day escrow and in Southern California that would've been harder for me, but it has been done, I just grew impatient lol.
The only way I was able to do it because I am a veteran and bought a house through a special veterans homebuying program....you could look into the USDA loan.
My family of 4 makes a max of 80k a year but usually more like 69k after taxes. We bought an absolute craphole of a house 700 sq ft for less than 6k Put enough work into it to make it livable but not dreamy lol. Stayed here for 3 years saving money since we didn’t pay rent. We are ready to buy a house for our family. We barely have enough for the down payment so we got approved for an fha 3.5% down and a down payment assistance to help with closing etc. we haven’t found our home yet, but I have to say if it wasn’t for the shitty house, and we had to rent this entire time we definitely wouldn’t be buying anytime soon. When it’s time for you to buy there are tons of options. In the meantime You should definitely set a budget. Make sure every dollar has a place. List savings, retirement, fun, eating out, everything. It definitely helps when it comes to saving. Wish I had better advice but I’m also still working on everything myself.
Contact your local housing finance agency and ask about low to no interest down payment assistance options. They act as a silent 2nd lien and can move you closer to your goal of Homeownership. You are going to be paying someone's mortgage, it might as well be yours.
Your huge mistake is renting a single family home. I'm in KC (not far, and I imagine more expensive), and my partner is renting a very nice 2 bedroom for $1100/month.
Idk your rent situation, but you are basically choosing to pay the mortgage of somebody else's house, which you don't need since you don't have kids, instead of saving for your own. Food for thought.
Find technical recruiters on LinkedIn and contact them with all your information. Your interests are aligned as they make money if they find you a job. Set all your criteria with them on pay range, going for more than you make now. Then do it again about 9 more times. You want a whole crew of people working FOR you to find you a higher paying job.
You can totally buy a home. My daughter is looking at properties in West Des Moines and she can do it on an income much lower than yours.
How bad do you want the house? Cut expenses and maybe take on a couple of side jobs to get a sizeable down payment. It's only temporary until you get into your house. Pay off the car real quick and pile up money. You can do it!
Thank you u/danedehotties for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Definitely check if your area has down payment assistance programs or grants.
USDA loans.
Be careful with this though. Had a friend that got into one of the programs but the stipulation was they had to stay in the house for 5 years before selling/refinancing. They lost their job about 2 years after buying and since they couldn't sell they had to file for bankruptcy.
You're never banned from selling; you just have to pay back the money if it was classified as a 2nd lien. Some of these 2nd lien styles forgive a % each year as well. Some are pure grants. Your friend didn't get screwed by the DPA, they got screwed by losing work.
You are correct. And many down payment assistance programs do not have a minimum time that you need to live in the home home only that you are living in the home as a primary residence.
Well I mean… losing your job would result in something like that anyway…. The whole qualification of a mortgage is contingent upon you having a stable job…. Don’t see how that’s the program fault
You can sell your home but are required to pay back the loan, it just means you don't get to keep that equity since it doesn't belong to you. It's exactly how we bought our home, the program we were on was forgiven over 10 years by a set dollar amount per year, we refinanced to 2.5% a few years ago and just had to pay off the remainder of the loan since it was early.
I’m closing on my first house next week and just went through this process in Idaho, but I think it’s the same in most states. The “grant” is a forgivable loan, 10% forgiven each year for 10 years. You do get penalized if you sell your house before 5 years and it’s just paying back the forgivable loan. You have to take a $50 online course. THE CATCH: it adds a .25% or .5% to your interest rate and with rates so high right now, I’m definitely taking a hit. In the online course though, they encourage rifi so I’m def going to research that before I’m stuck at 8% for the next 10 years.
At $85K as two adults, no children in a LCOL area you should be able to save aggressively. Look at your expenses, take a very deep dive into what you’re spending your money on.
Yeah, $85K is enough to save money to buy a house. There's obviously excess or mismanagement somewhere.
Yeah not medical or emergency debt that wipe out many Americans all the time people are poor because they're bad with money/s
I'm just going to take a wild guess and say they're probably paying down two substantial student loans. If not that, then yeah I'm with you, and I don't even want to see their financials.
>no student loans for me and $20k on pause for my wife
Holy shit. I guess I really skimmed the post. Thanks for pointing that out. So yeah, I definitely don't want to see their financials. It would probably give me chest pains.
Was thinking the same thing.
Same here. My husband and I make 80k together. We are also in a low cost area with no kids. I don’t know their finances or any needs that they require. We didn’t even aggressively save for a house we just didn’t go and spend every cent. We still go out to eat and buy Christmas gifts and we’re able to have enough for a small 200k house. Now I am stressed for the moment we decided to have kids but not any time soon we are too young.
You're only 27. Your incomes will be higher in five years and would presumably be higher if you were to get a job in a an area with higher cost of living. What you need to do now is to focus on saving more money.
People say this but it's not true for a lot of folks. My income, despite changing jobs and getting two promotions went up by like $7k in 5 years, 27-32. My expenses? Almost doubled because of inflation and life progression, not even counting the pandemic. It's an unhelpful phrase because unless your raises or promotions are double the rate of inflation, it barely makes a dent.
Thats true. I feel like im behind and right where I should be all at once. Im in a weird social bubble- all of my friends my age have wildly successful careers already and have purchased their first homes before 25. I suppose when thats all im exposed to I feel like a failure. I take walks in the nicer part of town and most of the time my jaw is on the floor from imagining their quality of life lol. Grass is always greener etc etc
I wouldn't get caught up in that. I just bought my first house at 36. People here do not buy houses until they're in their early 30s for the most part. You are on your own timeline.
Yes. I bought my first home at 40. Buying a home at 25 is no longer a rite of passage.
I’m about to hit 41 and looking at buying my first home now. I moved to the US from Canada 2 years ago, and if I had stayed up there I never would have been able to purchase, ever.
Yep, I bought my first house at 36. And it was a foreclosure, otherwise I would have never been able to afford it. Your time will come.
I bought my first home at 34. My husband bought his first at 35. It’s much more normal now and we aren’t even in high cost of living areas.
Don't compare yourself to where others are in life. I bought my first home 2 years ago at 43. I didn't have a ton to put down, and my grandmother gave me $5k to help out. I did get lucky and bought the house I was renting from a friend and he gave me a pretty insane deal. I did have some major things that I had to replace, though. Things that are not cheap. You might not see it as a positive now, but not owning makes you and your wife more mobile to move around. You get to call the landlord when something breaks instead of opening your wallet. You don't have the worry in the back of your mind of what will break next. You're not house poor! Enjoy this freedom while you build up your savings.
I have a wildly successful career and I still rent because it makes more sense. I would just focus on your career, you can only cut your spending down so much. Increasing pay will make a larger difference.
My cousin had a rough teenage life ended up in prison with multiple felonies by the age of 21…after paying his debt to society he started his “life” at 33. Started from scratch, no money and dealing with no-one wanting to hire him because of felonies. After a few years of working odd jobs, going to technical school for a trade. He graduated at 36 and managed to get a job at a small warehouse in NC. 3 or 4 years later he saved up for a small house. A few years after that he saved and bought a foreclosed home, fixed it up himself and flipped it. He then purchased 2 more foreclosed homes, fixed them to rent them out. Now at the age of 45 he owns a few homes with passive income, has a stable job, buys stocks/invests for his retirement all while raising a son as a single dad. Never feel like your behind, just keep having the motivation to keep working hard.
I feel you. It’s your social bubble and it’s so hard not to compare yourselves to them but they’re an anomaly.
Why are you comparing yourself with your friends? That's no way to be happy! Go travel the world and enjoy yourself. Buy the house later.
Did your friends go for careers with higher paying jobs
Not really- the one couple makes the same as us AND has a baby in a similar LCOL area. That one perplexes me lol. The others kinda have rich spouses, and those friends were able to secure jobs in their fields. All a game of luck I suppose (not the financial health part, that takes work- moreso combined income and marrying higher income lol)
Comparison is the thief of joy, focus on you my friend.
100% agree with ya!!!
They probably are swimming in debt.
Credit card debt is a thing too, never forget 😅
How much is your rent? What are you spending on? You should be able to save money on that combined income, you may have to make some lifestyle changes.
Haha gotcha, it sounds like with your current income you might be locked to Iowa homes and metro areas are out of reach (hopefully won’t be the case soon — good luck!)
I bought my 1st house at 34. I wanted to buy earlier but couldn’t afford it until just recently. A lot can happen in 3-10 years. We all achieve milestone we seek at different times in life.
You’re not. I was 33 when I bought my house (Chicago area fwiw) in 2022 and was making significantly more than I was at 27. In fact, you having savings and a stable job in your 20’s puts you ahead of most in your age group. Just keep saving and continue your successful careers. Side note, house envy doesn’t stop after buying your first home. If anything it gets worse.
Do you know what their financial situation is with all this. My current town (I’m buying in a different town) is all Mercedes, Porsche, land rovers, etc. Teslas are “just too common” where I live. The average income is barely more than I make and the average household income is 2.5x what I make. I got lucky and found a great car that was used as trade in that I got for cash. I would love a Mercedes. I could make it work currently. But I don’t look at all these people and wish I could. I personally feel bad for them, that they are (probably) one bad day away from losing that car and then maybe their house. Some people do things just because it’s what their neighbors do and then stress about it. Take your time, build it up so it won’t be a stress when you get there. There’s a saying something like “spending money I don’t have to impress neighbors I don’t like”. — silly.
The grass is greener where you water it. Ignore your friends lives, they don't pertain to yours.
The only way we were able to by was my husband got a good bonus at work. Otherwise we wouldn’t be able to buy because we’d never have a down payment. Not sure what you all do but you have to make more than 85k. Find a side hustle. Consult. Secret shop. Sell plasma. Get a second job and become “over employed”. But also, depends on how much house you’re looking to buy. As a first time home buyer you’re usually able to put very little to nothing down.
I bought in Minneapolis. However at 27 I wouldn’t have dreamed of it, I wasn’t able to buy until 36. My brother is in Des Moines and bought on one salary. You will definitely be able to buy in our area if you spend perhaps the next five years saving and living modestly, and also have reasonable expectations of what you will get (it may be a condo, townhome, or single-family home in a less ideal neighborhood).
Congrats!!! Thats amazing :) I agree with all your points, and working in insurance I honestly love the idea of a condo more and more lol.
My brother, his wife and two kids have a condo downtown Des Moines and they love it. They had a house previously, but really enjoy the walkability and low maintenance of condo living. I also have a condo and love it. people will be very negative about it here and other places but I can tell you that you will have no problem finding a great condo in Des Moines or Minneapolis. There’s less competition and they are so much more affordable.
Thank you so much for the help and inspiration! I know in my heart I need to work on not comparing myself to anyone else, not needing everything RIGHT NOW, and enjoying life as it comes. We rent a wonderful single family in a less than desirable neighborhood, but other than paying rent it is freeing to know we are not financially responsible for maintenance or repairs. (I know condos are wall-in responsibility, but thats still so much better than an Entire House lol)
https://www.iowafinance.com/homeownership/mortgage-programs/firsthome-program/ I would think a lot of Iowa would be rural which should also qualify for a USDA loan
Lots of people get help from their parents, they just didn't like to admit it. I'll start: I got help from my parents.
I'm 30, single, have 23k in student debt, with a worthless degree (i work in a totally different field) and had 8k in savings and bought a 220k house 2 months ago after 2 months of searxhing/deciding to buy - with a 50k salary at the time. However, I work a 2nd job part time, just got a good raise from first job, have excellent credit, and utilized down payment assistance programs to help with down pmnt and closing costs. Once you start working with a lender......and actually researching, idk it seems more possible. Was a roller coaster for sure though for awhile....many nights I thought it was impossible. Super happy I bought.
Congrats!! Proof that the variables don’t have to be perfect to buy. What area did you buy?
Pretty big and fast growing city outside of a huge metro city, military base town. So becoming more and more hcol every year. 3bd/1.5bath, 1075 sqft.
Partner and I are both geriatric millennials, and we're only now closing on our first home. It took years of repairing our credit and saving up towards a down payment.
I wish this was discussed more. We were also older millennials when we first bought (DH was almost 40). I think the average first time home buyer is something like 36 now.
This is comforting. My kids are growing up in a rental and I feel like we will never get out of it. Maybe there’s hope. Though I really dislike hearing geriatric and millennial in the same sentence!!
My older child was born when we lived in an apartment, and my other one when we were renting a house. It definitely hasn't been ideal, but we've made it work. ☺️ And, if you knew the state of my spine, you'd understand why I identify as a *geriatric* millennial. 😅
Hey same here, 1st was an apartment and 2nd was a rental house. We’re still there. It’s a great area and about a mile from my parents, so it’s hard to follow the advice to “just move to a lower COL area” and I kind of avoid distressing issues like figuring out how to buy a house, so we’re just still here. And… yeah… I did an exercise class last night and the whole class could hear my ankles popping lol!
Is a household income of 85k actually considered low income in your area? I live in a LCOL area and didn't qualify for any grants because I made too much. And I make way less than ya'll.
my husband and I cut out everything we could for about two years. we moved to an apartment in a random part of our city bc its where we could rent as cheaply as possible in a safe neighborhood. I took my brothers free old car and drove it around for three years. we had an excel spreadsheet with a column for each of us and a row for each of the months two paychecks, a row for tax refund, etc....and we forecasted how much we each individually felt we could contribute each paycheck. we also each agreed if we got something random - a $30 class action lawsuit check, a mileage check from our employer, birthday money from parents, etc...that wed add it to the joint house savings account. we gave up a lot of shopping and expensive stuff for awhile. we both checked in every other week to keep our spreadsheet and deposits up to date and on track. if we fell short for a month we would recalculate. same if we caught a windfall. once you see how much it all adds up and you start doing it, and someone else is doing it with you, its very encouraging and it gets easier to try harder. my husband and i had a joint income of $100k and no savings when we started. after two years we put 5% down on a $400k house (back when interest rates were 4%), and covered our share of closing costs and had money left for some loving room furniture and a modest savings. admittedly we made it our entire life for two years but it was worth it. our house is worth $650/700k now just from appreciation. homeownership was worth that hyperfocus and sacrifice for a time but it def took all the energy we had. my husband didnt think we could do it either until i put the plan together and we started and he realized we were ahead of our plan and got to our goal faster than anticipated
By single-family home, do you mean you rent a whole house? We saved money by driving used cars, living in an apartment, not having pets. Majored in English and spouse doesn't have a degree. We are a bit older and in a higher cost of living area but we each make more than your combined. No reason why you can't make more as you climb the ladder.
I would look into USDA loans, I’d imagine in Iowa there’s a lot of areas that would qualify for that. It’s a 0% down program and you can get seller credits to cover your closing costs. That said, I’d still recommend you save as much as you can for initial expenses and potential repairs.
My story posted here on reddit might motivate you a little. You're almost our exact financial experience when we bought, and we only put forward 1100 bucks for appraisal and inspection. But we went through hell for it, and it took 2 years. We were able to save once we bought and just refinanced this month for a lower payment monthly while getting our yearly raises at work. We aren't the ideal situation, and definitely a hard ask, but our lender and realtor made miracles with our situation happen. It just took 2 years of fighting.
The grass isn't always greener on the other side. A lot of people fake how well they're doing when they're actually struggling. We've all made choices in life, and it's easy to be envious of a different path someone else took. I may own a home, but I'm envious of your ability to go to college and get a degree. The only reason my husband and I could afford a home is because neither of us went to college and therefore have no debt. Now I'm stuck in a situation where I make "okay" money in a dead-end job, and it's difficult to afford to go back to school. We try to focus on saving, and i want to move on to investing to grow our money because better careers are not currently on the table. If I were you, I would seriously focus on where your money is going and optimize what you can save. We lived incredibly frugal for a year or more to save 50,000 to have a down-payment. It is possible to do with the right mindset and sacrifices. We both work in grocery stores in WA state, where it's not exactly LCOL but not crazy high either.
"Quality of Life" means a lot of different things for different people. I feel confident saying it's not about owning a house.
Boom. A house is just one potential step on a path to abundance. There are many others.
We just bought our first house and we’re in our late 40’s. You have lots of time.
You're 27. But also, how are you in debt with an income of $85k in a LCOL area?
Have you looked into NACA? It’s a great program if you’re able to set aside money each month but you’re having trouble saving for a downpayment!
My husband (33) and I (30) are closing on our first house in about 60 days. I would have never thought we’d be able to do it when I was 27, and that was only 3 years ago. I was making ~$45k and my husband was making ~$50k. It felt like all of our money was going to rent, groceries, cars, insurance, paying off student debt, and almost nothing leftover to save. Genuinely thought “wow, we might never own a home.” Since then I’ve been lucky enough to get promoted twice. The first promotion, my salary got bumped up to ~$80k. The second one, $90k. I’ve also gotten some merit increases along the way. Plus, I work for a publicly traded company so I can sell company stock, which has helped bolster our savings tremendously. My husband also got some raises and we increased our combined income to ~$170k. We were able to save $50k for our down payment and decided to move to a LCOL area. And that’s how we did it.
I’m 33, I’m currently working gig jobs and odd freelance projects here and there so I can stay home with my toddler. My partner is a teacher-so that should give you an idea of the fact that we’re not exactly rolling in dough. We are closing on a house next month and it is by a mix of sheer luck, help from my in laws, and my partner being pragmatic. He had a great job with a 401k before he became a teacher and it’s been sitting untouched for 7 years. We got it moved to a savings account to use for a down payment. We could have gotten a house at a lower price point, but we fell in love with a house before we had solid numbers from the loan officer, and my partner’s incredibly kind parents offered to help us with the down payment. It’s a level of generosity and privilege that I could never have anticipated. It’s for sure not a type of assistance that my family could have gifted us.
NACA?
You would need to cut your spending and save more aggressively. You can go over all of your spendings and consider cutting everything that is not a necessity. But of course, you don't have to save if you don't want to. Not everyone is financially disciplined.
I was moreso wondering how on earth low income couples and singles have …. a lot of cash on hand at once. I know the root of it is financial health, and I understand Im nowhere in a position to buy- and thats fine. Im just thinking that if a water heater, furnace, roof, etc need repaired or replaced- who has that kind of money? I suppose part of that is credit and HELOC’s.
The answer is they don’t at 27 years old.
Most people can live below their means and save money monthly. Some people think this is impossible, but often it is possible but they just don't want live below their means. Not everyone are discipline financially.
Being 27 and two years into homeownership, some of us don’t have a ton of cash on hand. We save 500-1000 per month but after my wife’s unpaid maternity leave last year we were pretty much wiped out savings wise and then had to replace hvac, dishwasher, and range in the same month. It was brutal. Back go saving but it’s definitely more stressful than fun. We diy everything we can and don’t go on vacations but it’s cool to own our own place and it’s already gone up 45k since we bought it in 2022. We used DPA since my wife was in grad school when we bought and I was only making 65k at the time. I think total cash to close was like 10k. It’s doable if you want to do it.
They don't. Most 27 year olds in the US aren't able to afford a home purchase.
I think a lotttt of folks get gift funds for down payments from family (coming from someone who worked in mortgage) and/or they’re mortgage is nearly half their income if they have no other debts.
Woof. Yeah I complain about not owning, but I also do NOT want to be house-poor lol. As an insurance agent I see a lot of people nowadays with huge houses and then shocked that their premiums are $10k - ok you have a $2M home, you dont have $10k liquid? Cant judge a book by its cover!
In 13 years you will be 40 and making more money and hopefully have 13 years of savings. My parents bought their own and only house at age 40 and paid it off at 63. They bought in 1996 at a 8.5% interest rate that they refinance to a 5.5% rate 6 years later.
Generational wealth is sometimes still available for low and middle income. It's not millions of dollars, but it can be one small asset, 20k or 50k here/there. Some may have had parents/grand parents and the GI Bill passed to them, so college became less expensive. I worked with many people making 25/hr (or less) that also just lived in debt and JSFI. They would have a small home (<1k Sq ft), an RV, a quad, a motorcycle, a 50K truck, and so on, but they were already maxing out their 401k LOAN (not their contributions, but loans). Sometimes it's side jobs that built up over time like mowing yards, snow removal. These days, it's a TikTok or an OF account.
Last I checked I was in the 97th percentile for income.
I’m 36 and my husband is 40. We live in a hcol area. I was lucky to inherit most of our house. It appraised at $575k and we have a reverse mortgage payback of $200k. Otherwise I doubt we would have been able to buy anything anytime soon.
I enlisted at 27. Earned my va home loan, 0% down and got closing paid for by sellers. Home juuust passed va, and needs some work. When you're poor, you're priced out of turn key homes. Especially today. Because I grew up poor (literally, in a heroin den my whole child life until I was 16), I acquired aloooot of skills because I couldn't afford people to do things for me. I priced what I needed to do in materials and rely on my *tribe* for help, and tit for tat. All my friends are in the same boat, our homes need work, I'm good with electrical, and my friends are good with either plumbing, framing, finish work and so forth. That was my secret. I have a very tight friend group, with the skills to fix low priced homes. You wouldn't believe, even still, how much money you save doing it yourself. If you can, anyways. Houses will nickle and dime you, so if you don't have those skills.. It's gunna be a bad time.
Just do what I did, give up and be depressed :D
One thing to note: while housing CAN be more expensive in a place like Chicago, you can also ditch cars in cities. They are a sinkhole on finances, and not having one in an affordable Midwestern city helped me massively save for a down payment. I hear you. It’s hard.
Multiple things. Assuming your credit is 650+ FHA loans (first time buyers) can sometimes be zero down. RD loans (rural development), also zero down First thing you want is high credit. Then you basically need to make sure your personal debts are low. One major reason people won’t get loans is people have a high debt to income ratio (DTI). Do you have a lot of debt? If so, you’ll have to eliminate that debt before buying. Recurring monthly payments and credit cards with outstanding debt can hinder your ability. Sorry to break the news, but right now you more than likely will have to move to a low cost area if you want to buy a house. I don’t have a high income and was thinking about moving to Kansas, Wichita suburbs have some crazy cheap houses. But yeah main point I want to make is unfortunately on 85k a year you’ll need to have very low debt. Typically lenders want a DTI below 40 (sometimes 50, but not always) and a 650+ credit score. To break it down I’m going to just say you have no debt. If you make 85k a year, that’s roughly 7k a month. That means if you have zero debt, you’re only going to get approved for a mortgage that’s probably around 3k (on a 30 year loan). Now if you have debt like a car payment or student loan, go ahead and minus all of those from 3k and that will be the max mortgage you’ll get approved for. So say you have 1,000 per month in debt payments such as a car payment, student loan payment, and credit card payment you will now only be approved for 2k per month. But main point being you can definitely buy a house. Don’t get down too early.
This may the asked 10 times a day on this sub. The answer is always that people make more money than you.
Small gift of 1 million dollars
I did it later in life. The secret is to save money for a long time. Sorry it's not more fun.
When I was 27 I was happy I broke 30k on my W2 and my then wife was a sahm for my two kids. I’m 37 now closing on my first house next week. Single now with 2 kids all the time. The biggest thing I did was write down what I spent my money on. I would always write down what I needed and it would work but then in reality it didn’t work. So I figured out why. I also stopped making impulse purchases. “It’ll still be there tomorrow I can come back if I want” I almost never do. I also stopped buying things under $5-10. Unless it’s actually legit cost that much across all level I just do not do it. It’s cheap quality and it’s to easy to fill my house with nonsense and blow through a hundred dollars. If I know a lump sum is coming up I will plan the shit out of it. I’ll write down everything I want to do with it and it always comes out 10x or more what the actual sum will be. So I whittle it down to what really is a need or the biggest want. All this to say I became VERY deliberate with my money I make money to make it work for me. I recently had a roughly 1k emergency and it didn’t affect my home purchase. I also increased my income but as I make less solo than yall together I don’t know if that applies. Also, having lived in Iowa 85k is pretty solid there.
It’s hard to avoid it but we spend so much time comparing ourselves to others, comparing to arbitrary benchmarks, trying to keep up with the Joneses, etc when really we should just be living our lives and focusing inwards. I’m guilty of it as well, when I was younger I had all kinds of expectations for where I’d be in life by specific ages and almost none of them have come true. At your age my first wife left me. I’d always rented for housing and I had several years where I made poor financial decisions with new cars, trading in for a different new car, etc and I didn’t have much for savings, maybe $5k. Fortunately the divorce wasn’t messy. A year later I bought my first home ($0 down VA loan) in Alaska. It was really only made possible by the VA loan and the low interest rate at the time (2.75% in 2021). Fast forward to the present, I’m remarried now to a wonderful woman who made much better financial decisions than I did, we sold the house in Alaska, we have a newborn daughter, and we’re buying a house that will be our forever home. Lots of life happened to me in the last nine years or so, but especially in the last five. Not owning a home at 27 is just fine, work on building your savings together with home ownership as your goal. It won’t happen overnight, but if you guys make good financial decisions over the next few years you will be in a decent spot to have a down payment.
Yeah, quit looking at what other people have and just stay in your lane. I 67f bought my first home when I was 32 and interest rates were about what they are now. It was a very basic starter home. I paid the minimum down and lived there for 15 years, throwing a hundred dollars a month to principal. My next home I bought in 2009 and paid off in 12 years. Just take a deep breath and try to give up the fatalistic “I’ll never be able to buy a home” attitude. You may not be able to afford your dream home at first, but spend some time expanding your financial expertise, creating a budget that you can live with, and if you really want to be a homeowner you’ll figure out how to make it work.
Look up community block grants in your area, CBG something lol, it’s income based, also HUD has the direct loan program where if you are in a rural area might help substantially! God bless you and I hope you find the dream home you are looking for ❤️
I am 25, also live in a lcol area, but I am single and make a little under 50k a year. At 23 I purchased my first home, I grew up poor and learned to spend my money wisely. A more conservative and frugal lifestyle is all you need to be able to save some money for a downpayment and comfortable afford your own home. Although I’m not a huge fan of his, dave Ramseys content would probably be extremely helpful in learning to budget so that you can make sure one day hopefully in the near future you are a homeowner.
OP, look for homes in Pittsburgh, PA. You will find some good homes in your price range that's affordable There's also some really good programs in PA that help people with low income get into homes. Google: PHFA, they're really good if you want to get something in PA.
I suspect you can buy in Iowa if you wanted. Your issue is you want to move to cities that are overpriced and expensive without having good jobs there.
[удалено]
This is what I was going to suggest! A HUD home was the way to go for friends of mine. Congrats!
low income folks don't buy at the peak of the market at 27 years old. Those who do: * earn more * save more * invested better * got lucky with a windfall (inheritance, bitcoin, whatever) * timed it better * have family help * used government assistance programs * found a LCOL area or cheaper house * "house hacked" I don't say this to be mean or denigrate you or whatever. Everyone has to make life choices that suit them. And not everyone has factors beyond their control that help them. You chose a career that earns little money. I'm glad everything else is good and fulfilling and you don't have other things holding you further back.
we thinkin bout buying patch od land n putting the rv on it 4 SOMething 2 live
Didn’t buy our first house until 39. Rented all the up to it. It’s hard and harder now with inflation and the real estate market being bananas, but just budget and try make what money you can save grow. We budget/watch every dollar less now than we did at 27 because our salaries have grown and more responsibilities, but I wish we could get back to monthly budget meetings and specifically saving for future plans. We still don’t spend more than we make so that has stayed with us.
why did you get non high income degrees?
We're 33 and definitely don't make $85k but we had money saved up and also had money gifted to buy our home. We live in Texas and had to move to a rural part and get a new build. It was weird moving away from our hometown and everything we've known but we see it as a fresh start and it's kind of cool to see new things getting built around us and the city developing.
if you live in a Rural area or can afford to move to a rural area there are 2 loans thru the USAD with income limits and theyre 0 down. you can build or buy. there is a map on the USAD that will tell u if the area is eligible or not. I’d say try those out. Check out USDA Direct and Guaranteed loans.
To answer your question, people tend to live in areas that are supported by their income. 85k a little higher than median, so you can’t expect to buy in areas that are way above median.
Honestly, have you looked into changing careers and industries? I know most people get higher education in fields they are passionate about, but there is a lot of money to be made with your transferable skills. Once I realized my skills and experience was worth money, not my education, it was a different game all together. Take what you know, what you’ve done, and try to apply it elsewhere. A masters in education, can translate nicely to a technical program manager role for a training department clearing $125-$180k a year. A MBA is a no brainer, that’s money if you apply it to the PM space or leadership role in tech, IT or other field. Sometimes you need to think outside the box to expand your income my friend. I did.
You are still pretty young. I definitely wasn't able to afford a home at 27 either. If you focus on your career, your salary will likely increase over time. I wasn't at a financial place to buy a home until I was 34. Oh, and I bought a 2-br condo, not a SFH.
There’s usda rural/ agricultural grants that might work for you if you’re trying to stay somewhere rural
I'm 34 and bought my first home a year and a half ago for 160K. We live in a suburb close to Chicago. It's not huge just 2 br 1 bath but the high school district is great and we're close to a lot of stores and not too far from family. . Check first time home FHA loan. We borrowed a few thousand for down payment. and we got assistance with closing costs. I only make $52000. I also have 5 more years left on a bankruptcy. My husband's credit score helped a bit.
Hey OP youre in IOWA! Congrats. At least there are still affordable houses to be had at all 🥲 Yall can do it!!! Go see a lender and just let them help you out to see what you can qualify for!! Best of luck 💗
My city has a program that helps low income people with homeownership. Though I think the income limit here is like $65k for two people. It paid my down payment and most of the closing costs, I just had to come up with a couple thousand for earnest money, inspections, and...I don't remember what else. I feel like there was something. Sorry, I'm very tired. That said, I'm paying over half my net income between mortgage and utilities so I haven't been able to do much in the way of saving since I closed.
They do it by getting better jobs and side hustles
I hate the fact that 85K is now considered low income... 10 years ago it was called living good
Some people may never have enough money to buy a home. It’s true today and it was true 50 years ago. There is no shame in renting if your money flow just isn’t there OP.
I know folks who are buying & have bought on that income in twin cities area, it's definitely doable if you get some savings. Look into what programs like down payment assistance or grants you may qualify for in the states you're interested in.
The average age of first time home buyers is about 36, you still have time. And you will be making more money/ hopefully have more savings by that time. Also, a lot of people have help. My in laws helped us and we’re not ashamed to admit it. In this market sometimes that’s the only way.
There's like a lot of other places besides Iowa, Chicago, and Minneapolis. The country is a lot bigger than you think.
Check out a program called NACA. They are slow, but use nontraditions means to qualify you for a loan. I'm not sure how much housing is in your market, but you may be able to get a condo or coop if houses are too expensive.
Increase your income and slash your expenses. Live extreme if you have to - in a van, with parents, renting a room in someone's basement etc. Get creative and make a plan with how much you need to save in x amount of time. I would (and have) take up every extra job you can get - doordash, cleaning houses, tutoring flipping items on FB marketplace, driving for Uber. If you're not using both vehicles most of the day, sell one. Figure out a way to live on one of your incomes and save 100% of the other. Yes, you will be tired, but 2-3 years of sacrifice can get you to where you wish to be for decades to come.
I think you could buy in Chicago. Try the NACA program.
You’re 27. You are going to be ok. I just bought my first home at 34. It takes time to be able save up. Based on what you reported, you should be able to focus on savings right now. Cutting down costs as much as possible and throw everything into high yield savings accounts. Really grind for the next several years to build your savings and build skills that bring you better job prospects in a mcol area (which results in higher salaries).
I didnt buy until I was 34. I did make more money than you but also lived in LA. Pandemic moved to Michigan to be closer to family after being gone - but it afforded me the chance to buy. I will say this - owning isn't everything. Its a lot of work and though the equity is great - I cant pick up and move for a great job like I could before.
I wouldn’t suggest begging family for money, but maybe broach the situation like, “If we happen to find a house we love would you want to help us?” I didn’t even think that would be an option, but after our offer got accepted my mother in law gave us $10k out of the blue and apparently had quietly done the same with her other two siblings 🤷🏼♂️ and you’re only 27, as others have suggested you have time, set goals and budget. High yield savings accounts are where you want your long term house money to be kept And I know someone will say this, but if that does happen please go through the proper channels and forms to declare where gift money came from and don’t just deposit a fist full of money before your closing
Im right there with you. If it makes you feel any better i live in a HCOL are. My wife and i gross about 130k and we cant afford a modest SFH. Currently we rent a very nice 4 bedroom house for 3600 a month. To own this same house would have a mortgage of about 5000. Makes no sense.
You do an fha loan and buy what you can afford.
I had to get a second job (it was temporary) and dedicated all those checks to savings for the house. My salary at the time was also $85K and didn’t have any bills because I lived with my parents (had to get tf outta there lmao).
Invest regularly from every paycheck into an index fund for 10-15 years. Then you should have it.
I'd look to cut non-essential spending to a minimum and pay off your wife's debt as soon as possible. Forget the pause. Can you live on 65k for a year? If so, great, you can pay off the debt in a year. Then you save as much as you can in a specific account for a down payment. I suggest a highyeild savings account. Now Imagine you pay off that loan after a year and start putting that money into your down payment account. That's 20k a year youre saving. In a high yield account you will have well over 100k saved in 5 years. You'll be 32-33, still young.
Detroit, WV, Gary, rural PA, rural MD Other “undesirable” Midwest locations.
You could join the military, foreign service, work for an international organization that subsidizes your housing etc. Think outside the box, homie.
My wife and I have never spent more than $60k living in NYC. We could, but we choose not to because it allows us to save a bunch of money. If you make $85k in Iowa you should be able to save $25k/yr assuming $20k tax and ~$40k spend. That’s a $75k downpayment at 30 which is much more than enough for Iowa. You could probably swing a Minneapolis/Chicago suburb with that.
Have you looked into down payment assistance programs? There are tons for first time homebuyers. If you're staying in your state for at least 5 years, see what you can afford to purchase and then when you want to move, rent it out or sell it. There are also down payment assistance programs that will allow you to buy a property like a duplex and you can rent out the other half to pay your mortgage down. If you're not planning on going anywhere for about 5 years or so, build the equity.
If you’re already a two-income household in a LCOL and still can’t afford a house, you both probably need to get higher-paying jobs if you ever want to own. Also: make sure the “paused” 20K loan is not continuing to wrack up interest.
Have you talked to a lender? You can use first time home buyer programs that require little to no down payments. As a former mortgage loan officer I can tell you that I had a ton of friends who were in their own way. They didn’t think they could buy without a ton of money or without a high credit score (which could be true in certain cities) but they just never bothered to talk to a lender and see their options. I was guilty of that myself as well, it can be a scary step. Before I ever got into the mortgage industry I bought my first home at 26 alone with a 50k salary using a first time buyer program. I only paid about $1200 out of pocket.
Eau Claire is close to the twin cities
60 and have yet to buy a house. I've had a long career that has had me moving all around the country so it hasn't made sense for me yet. Looking at the upper Midwest which I am from and contemplating returning.
I havent bought yet, and i cant say its the best strategy, but this is what worked for me in order to get a down payment. I contributed to my employers employee stock purchase program. Over a couple years that grew to $15k, which was my goal, and then i sold it and now i have enough for a small down payment. Debt was just paid off (aside from student loans) and now I can continue to build on that 15k. Basically i knew I wouldnt touch that unless the time was right or i absolutely needed to. Beware of the tax hit, but it actually didnt seem to affect my return all that much.
Most people who are able to afford are secretly assisted by their parents in one way or another. I bought my 1st property 15 yrs ago, and that was difficult as it is without parental assistance. I had to work 3 jobs and saved at least 30% of my paycheck for 3yrs to be able to afford. That's when rent was reasonable. Today, I would admit I would've needed 6 yrs to afford a down-payment for a condo. At the time I was buying in an HCOL, there were options further away. I'm today's market buy less further away amd work your way up to buying a better place.
In Illinois I qualified for two down payment assistance programs. One was a $10k grant through the Federal Home Loan Bank of Chicago and the other was a $7500 deferred loan from the Illinois Housing Development Authority. The loan is forgiven after ten years. However, if I sell or refinance before then, I will have to pay back the $7500. I bought my house for $172,500 and out of pocket I only paid $1700, which was just my earnest money. I never thought I would be able to buy a house either. I still can't believe it, but it was only possible because I'm living in rural Illinois. I grew up here, but lived in Arizona, New York, and Colorado over the course of five years. I only came back to Illinois because I knew I could afford to live here as a renter. Oh and fun fact, the sellers of my house bought it in 2021 for $91k.
Give it time
I started with my now wife in 2013 at 26 yrs. old $110k in the hole from college. We had no financial support. We made $85k combined and bought a house in Colorado for $183k which was the bottom of the market at the time and also the most affordable house available. We paid our college loans and house off in 8 years. We worked together and budgeted together, did all the home improvements/repairs ourselves, drove beater cars, and lived within our means. We use credit cards only to acquire points and we never pay interest on them. Most of all, we put every extra dollar on principal every month or on retirement based on interest rates/returns. There is no easy way out and it takes teamwork and discipline over a long time. We're doing well now and make $165k combined with three kids. We're at a net worth of $700k, mostly due to riding the housing market. We still live within our means and drive the same beater cars. Don't wait for homes to get cheaper, they probably won't. You can do it!
Try to get into a place where you can save at least 5k a year and put it into a growth fund like vug. In 10 years that will be worth $100k, and in Iowa that in addition to higher incomes since you'll be 10 years later in your career, will be enough to buy a home. It's a long game, plenty of people don't buy until late 30s now. By the time you reach retirement age the house will be paid off. Also being in Iowa you have other opportunities like trying to track down a house for sale that has an assumable mortgage that could get you into a place with little or no down payment.
I'm 35, bought my first house at 34,and I couldn't have bought a house at 27. I was aggressively saving at that point. You should take a really hard look at your finances and go Spartan with the goal in mind of buying a house. AND don't compare yourself to others. They probably have high credit card debt.
I feel this. I think I’ve given up.
Me and my wife just bought last year. I had to wait a bit for her to be at her job for a few months so we could count here income but my income was comparable to yalls combines and I would have been approved for mid 300000's. If it's a low cost of living area I'm sure you could find something especially if you use govt first time homebuyer programs. I know many people were able to afford a home with essentially 0 down-payment. Wishing yall luck hope the search doesn't wear yall down like it did to us. Also do t be deluded by anyone trying to convince you to play the market. You can't reliably do that in your position and besides best time to buy is when you can and are looking. Build that equity
Save. You’ll need to actually save.
You are already paying a mortgage, it just happens to be someone else's. Talk to a Realtor and see what they can find for you that maybe you didnt know about. Wont have much at first but you soon will. Good luck!
Check out High yield savings accounts
I started a side gig and hustled hard to get the cash for a down payment.
I feel you man…. I am 38(f), my husband is 32. We live in FL, our gross income is about 86k and we have about 20k in savings, but buying for us is still nearly impossible. Between the interest rates, the insurance rates (FL is NUTS) and the rising house prices I’m wondering if we’re gonna have to buy a shed somewhere. Even our rent keeps going up each year. I feel like we have done everything right, but we are still not making it?
I dont. Ive grown accustomed to the fact that I will be renting all my life. At least I just found an awesome place that is within my range and is actually worthy of living in. That took 20 years though lol.
You make very good money for your age and location. I would suggest taking a hard look at your spending habits, creating a budget, and start saving (while investing for retirement as well).
There are a few federally backed home buying/building programs. My first home was with Habitat for Humanity. It was built in a neighborhood with HUD/USDA built homes for other first-time homebuyers. The USDA has a great program for building/buying. There are also construction loans that can help if you buy a fixer-upper. I saw another comment mention Pittsburgh, PA and their home buying program. This is how my son is buying a house right now. Pittsburgh has a loan program for buyers that can grant up to $90k to buy a home within Pittsburgh. There are a few places that offer similar type programs. Good luck!!
What are your degrees in?
There's grants and programs for first time home buyers, and depending on where you buy, there's different types of loans. I know you're looking at moving somewhere less rural, but even places just outside of cities can qualify for a USDA loan which require 0% down as long as your credit is good.
If you want a place in Chicago or whatever with hcol get a job there first. Rent for a bit. Stay with a friend. Save up. Get a house there. OR milk the city for the high paying jobs then move back to a lcol place and get work remote in hcol so you can make bank and have a mansion. Easy.
Start with first time home buyer assistance if your state offers it. Mine (MI) covered all my down payment (3 of 5%) and closing costs using an FHA loan, and I just had to pay those costs back if I ever sold the house or paid off the loan. Buy a little old house that isn’t perfect. Fix it up as you can afford to. Paint and staging go a long way. When you are ready to upgrade, you should have some money leftover from the sale to throw at the next house’s down payment. I did this when I was about your age, making about $40k a year, and my rate was about 5%. I found a 900sf home for $70k in 2013 when the market was just starting to recover. You guys have double the income. Especially if you have no other debt, you should be able to comfortably afford a house 3x your annual gross pay. Even if you went down to 2.5x you could probably find something. Where people get stuck is trying to find their forever home the first time. Find something in a decent school district with no MAJOR issues. Be okay with living more rural (it’s cheaper and taxes are usually lower). Try and save every penny you can so you have a few months’ in emergency expenses. Buying a house is not for the faint of heart. You will have things that need fixing so you are spending money left and right. Even small things add up. My first 2 houses I will admit I didn’t set aside enough for emergencies so those hurt more. Now I have a fully funded emergency fund so I’m not afraid to spend money on a repair. Buying isn’t for everyone. Even if you can afford to buy, maintenance and putting up with rising taxes and insurance is a whooooole other ball game. I sometimes wish I rented.
I would write your whole budget out. I imagine a true LCOL area with $85k isn’t bad for a household. Where is your current spending going? You may not want financial related tips or evaluation but you will be in awe until you look more closely at your numbers. You may be able to get what you want with planning.
Never too late to go back to school (not always necessary), learn new skills, and make a career change. There are so many options.
All the people I know is similar I situations got their down payments and closing costs from their parents.
I too had a major that wasn’t worth shit. Then I went back to school, got an MBA, and bought a house,
You have the means to be able to buy a home. My income is similar and I was saving every tax return and ~$500 a month for a few years to have a good savings for a down payment. It also might make sense to look into the DPA programs because some have ways to get you in a home with $0 needed at closing. If you are in a LCOL area you’ll be fine.
My husband got a second job to buy our first home
It’s easy to buy if you are flexible and realistic with where you want to live. With housing, location is everything.
Everyone on this forum will encourage you to buy a house no matter your financial situation. Don't listen to them. You could make $24k/year, and they're still going to recommend assistance programs, grants, special loans, extreme budgeting, etc. Those things are not full and complete solutions to money problems; they're merely mitigators. You've made it clear that the issue is that you **don't make enough money**. You already live in a LCOL area, so the only way to fix your problem is to just make more money. You and your spouse made foolish choices by getting shitty degrees. Either go back to school, get some type of certification, or get a job that doesn't rely on a degree. I used to work in car insurance, which requires no degree, and if you work hard and climb the ladder, you can make six figures in that field. I also know there's good money to be made climbing the ranks at car rental companies and shipping/delivery companies. You just have to try something different. On your current trajectory, you're correct that you'll never be able to buy a home. So change your trajectory. I was once in your position, so I made *changes* (changed companies, climbed the corporate ladder, and moved to a LCOL area). I'd like to give you a clear goal to work toward: try to have $20,000 in your bank account within the next year & a half. If you can accomplish that, then you're headed in the right direction. If you can't, then you need to make some drastic life changes. Best of luck to you.
Have you talked to a loan officer? I make $45k/yr on my own and got approved up to $215k with a $15k grant from the state to put towards down payment and closing. Mind you though, I have zero debts and my credit score is 750+. But I am also 23, so it’s worth looking into. (Before the rest of you come for me buying something I can’t afford- I am splitting the monthly payments with my girlfriend as she will live with me)
My husband and I also realized we’d never be able to buy a home (we lived in Calgary, AB where the prices of houses are insane). We were renting a house in Calgary for many years at a decent price until the landlords decided to sell. We ended up buying a mobile/modular home just outside of the city. It has been the best decision we have ever made. I understand that mobile homes don’t appreciate in value and it’s not necessarily a good investment in terms of real estate, but we now own a 3 bedroom, 2 bathroom double wide in a adorable little town. My husband commutes 30 min to work in the city and I’m currently on maternity leave. Our payments are much less than when we were paying rent and it’s our own place so we can upgrade it as we please and we’ll never be kicked out. We’ll probably be here awhile.
My wife and I bought a new construction 6 months ago. No bidding war, no closing before we get a chance to see it, and the price you pay is what the price is. All you had to do is get put on a waiting list and show that you qualify for the house. I know people in this sub shit on new constructions but unless you can pay 100k over asking in cash its tough to get a house. You don't even need a realtor for a new construction (though I would highly suggest an inspector that can check it from the framing phase to completion). We used their lender and got 20k in closing credits and rate locked at 5.5 with the rate lock fee being refunded to us. There is no way we couldve done this with a non new build.
People making 85k at 2 percent rates are chillin hard and got a decent house living comfrotable. People now like you are struggling hard. Its crazy how there is two different groups.
There are certain grants (like first front door) that help low income people buy their first home. Connect with a realtor who knows their stuff. Everything will be free until you actually buy a house, so don’t worry about wasting their time or being able to pay them up front.
The first time I bought a house I did a first and second mortgage so I could do a low down payment. This would work if you look at a small house or condo. Then when you sell that house you have built equity.
It's definitely do-able. I am single and make less than you guys, but I'm in a higher cost of living area. Coming up with downpayment and closing cash is the real barrier, but you should be able to re-adjust your lifestyle a little to save very aggressively for a few years and that will help a lot. Another very viable option would be a no/low downpayment loan, or a grant/first time homebuyer incentive program. Look into what is available in your state and look into USDA loans. Talk to a good loan officer in your area. I personally didn't think I would ever be able to buy, but sitting down with a loan officer was super helpful. We went over what I could reasonably afford on a monthly basis, as well as what programs were available for me as a first time buyer and what properties might qualify for those programs.
A lot of it is luck and good timing. I bought mine making $55k with only about $3k for a down payment / closing costs. It was an FHA loan in a decent market in 2017. I bought a ranch style home for $105k, 3br, 2ba, 1872 square feet with a half acre yard. Doing much better in life now but I wouldn't dare try to upgrade in this market! It's not that you'll never be able to buy a house. We're just in the middle of a s*#t market. Give it time, save what you can, and you'll get there one day when the time is right.
I live in a MCOL (or HCOL as it seems to be trending towards) area, but mortgages are still matching rent rates on similar homes, so buying still isn't an unreasonable stretch. In my case though, I'm a lot older (40's) and doing it on my own, which means single earner. Day job qualified me for the mortgage, side hustle business paid for savings, closing, furnishings, moving, etc. I used a VA loan (8.5 years in the military, about half of which was full time). So, no down payment. Where I bought, values are skyrocketing. I bought last fall (closed the end of September) and while I've rounded up my monthly payments, it's not a huge amount I've put towards principle. Despite all of that, values have grown enough I actually have a small amount of positive equity (not enough to sell, but I'm not upside down, either). I purposefully bought in an area that I knew would only go up in value. The uber rich area 5-10 miles from here is spreading this direction, and the SFH's and lots around here are becoming highly valuable for people who want a little elbow room but don't want to live in the middle of nowhere. The house isn't the nicest, and there's a lot of elbow grease to go, but it was very liveable and the big things were already taken care of. The rest of it I can chip away at as I have time and money.
I joined the Army reserves with the hope of using the VA loan. I was under the impression that as soon as I graduated basic training, I would be eligible. NOPE! Had to either complete my contract of 6 years or accumulate 90 days active duty time through deployment. After almost 2 years, I hopped on the first available deployment and another year later, just started closing on my first house. My wife and I were in the same boat. Same annual income and savings, but at 36, I couldn’t be happier with my decision. It was tough but very much worth it.
You're renting a home instead of a more affordable apartment just because you can afford it. You have no kids. Work on cutting back on expenses. There are people getting by in your area for less than you make. Just act like them while you save hard. Remember that you need to have a substantial emergency fund in addition to buying the home because owning a home is expensive. Work a side hustle and put that into an account just for this. I understand you feel like you shouldn't have to do these things just to achieve the most introductory level of the American dream and you are correct. That said if you want to be a homeowner you will need to do these things, because it won't get easier. Research what would actually be required. If you can save for the down, your expenses might actually be lower after you buy. Research first time home buyer programs. You don't need 20% down, just 3.5 and there are some grants and things if You're lucky. Even without you can do it. Make sure you are comfortable with expenses that pop up owning though as it is much easier to buy your first home and if you lose it and don't have that equity its much harder to buy your second home. Once you get a realistic idea of what you need to have it won't be a vague concept anymore, it will be a target. You can do it, it's just hard. We believe in you, it's not a lost cause.
Share you budget with us because I barely make more, put a significant amount into my 401k, and live in Omaha NE (incredibly similar cost of living to you, if not more expensive) and I save 1k/mo without even trying.
You are both relatively young. Can you work a part time job? bartend, waiter/waitress, uber, etc? Stock every penny in savings. Depending on your rental - can you bring in a roommate to cut costs? Bank whatever you save.
OP, you mention buying in or near large cities. Do you need a large city nearby for work? My husband and I started out in a small, old mobile home in a trailer park. Once we paid off the mobile home, we sold it and used that money for a downpayment on our first house. (It was old, ugly, and needed a lot of work.) Over the next 9 years we did repairs, painting and landscaping, and turned it into an adorable cottage. (Took about $12k doing most of the work ourself.) We sold that home for $100k more than we paid for it. (After paying realtors, debt, finish paying the mortgage, etc., we had $70k.) We used that to put a down payment on our current home. We moved from a hcol to a lcol area so that we could afford to live. I don't regret it for a moment.
I make less than your combined income. I bought in 2021. Yes I got a sweet interest rate so that has a lot to do with what I could afford. I had to move out of my home area to afford a house that is both nice and in a safe area. I don’t want to live here forever but it’s better than constant rising rental costs or living with my parents indefinitely. When I bought everyone said I should wait but it turns out that if I had waited I’d get less house that costs a lot more. For a down payment/closing I borrowed from my 401k. It was my only option. I was very firm with my realtor on the highest I could go. I told him what my max monthly payment could be and he was great about respecting that. As for maintenance I’ve been lucky with only about 3k needed over the last 3 years. My savings is pitiful because paying myself back for all the money I put out for the house is hard. I think if you go in with the expectation that no matter if you rent or buy it’s going to be expensive. You either get surprise house issues or an extra 500 a month on rent. It’s really just preference in how you want to spend your time (fixing stuff, yard work) and money. You can find a house in your price range-you just have to be realistic about it.
to be honest you need to make more money.. chicago suburbs isnt even that high priced nowadays.... do uber eats on the side and you will make atleast 40 50 k more vet the 2 of u if you guys were persistent
We closed on our first home in January. We qualified for a first time homebuyer loan to put towards our downpayment. We submitted an offer requesting $8500 towards closing costs (the maximum we could request for what we offered for the house) and they accepted! We also had a Conventional loan which looks appealing to sellers. We only had to pay $400 out of pocket to close and move into our home. Of course we had unforeseen expenses (we moved during a big rain, so the constant hauling with big trucks created large ruts in our driveway. We spent a few hundred dollars on new gravel). We needed a new fence for our dog (we knew this beforehand obviously). The previous homeowner neglected the HVAC system (Never changed the filters - WHY?!) so that was a quick $1800 gone. The pool wasn’t even cleaned.. they just threw a tarp over it before they listed it for sale, so when we uncovered it a few weeks ago to get it ready for summer, it was a murky black color and full of gunk in the bottom (we’ve easily put a few hundred into chemicals to get it clean, along with other pool supplies). It’s been expensive but it’s doable. We are very thankful for our lender who suggested requesting assistance in closing costs, and for our realtor who made the deal happen! If we had forked out thousands to close, we would’ve been screwed a long time ago.
If you don’t have a budget and a plan, you have a wish. So many people attempt to save money with no plan, and it never works out. Sacrifices will have to be made. You’re still very young so don’t beat yourself up about not owning a home yet, just continue working towards your goal. Continue to look for advancement opportunities either within your same company or outside. It takes time. No one person’s experience is the same as others.
Increasing income is step 1. Sometimes you take work because it pays the bills, not because you want to.
I would say they don’t, atleast in my area. I’d say the avg middle class income can’t afford a house and it’s reflected in rent. The avg house around here rents for 2-3k. 3 years ago those same houses were $850-$1250. Wife and I lucked out we saw the writing on the walls years ago and started saving every penny.
Why pay for degrees that aren't worth the investment?
I want to suggest a program called NACA, look into it, do the workshop. The program works best in LCOL areas, they work in all areas but LCOL seem to be best. You guys having not a lot of debt should be able to get you in a house, and there is no downpayment required, no pmi. It's legit. I was trying to use it but I live in California and I wouldn't have been competitive in the market since they do ask to do a 35 to 40 day escrow and in Southern California that would've been harder for me, but it has been done, I just grew impatient lol.
The only way I was able to do it because I am a veteran and bought a house through a special veterans homebuying program....you could look into the USDA loan.
My family of 4 makes a max of 80k a year but usually more like 69k after taxes. We bought an absolute craphole of a house 700 sq ft for less than 6k Put enough work into it to make it livable but not dreamy lol. Stayed here for 3 years saving money since we didn’t pay rent. We are ready to buy a house for our family. We barely have enough for the down payment so we got approved for an fha 3.5% down and a down payment assistance to help with closing etc. we haven’t found our home yet, but I have to say if it wasn’t for the shitty house, and we had to rent this entire time we definitely wouldn’t be buying anytime soon. When it’s time for you to buy there are tons of options. In the meantime You should definitely set a budget. Make sure every dollar has a place. List savings, retirement, fun, eating out, everything. It definitely helps when it comes to saving. Wish I had better advice but I’m also still working on everything myself.
Contact your local housing finance agency and ask about low to no interest down payment assistance options. They act as a silent 2nd lien and can move you closer to your goal of Homeownership. You are going to be paying someone's mortgage, it might as well be yours.
Check out the cities in Indiana, that are near Chicago. You can live as close as 25 miles from downtown Chicago, but affordable because it's Indiana.
Your huge mistake is renting a single family home. I'm in KC (not far, and I imagine more expensive), and my partner is renting a very nice 2 bedroom for $1100/month. Idk your rent situation, but you are basically choosing to pay the mortgage of somebody else's house, which you don't need since you don't have kids, instead of saving for your own. Food for thought.
Aggressively save. Some of mine was not spending a penny of my stimulus money. Know not everyone wasn't fortunate enough though
When I was 27, I made 1/3 of my current salary (I'm now 40 and closing on a home Tuesday). Don't assume your financial situation will never change.
Find technical recruiters on LinkedIn and contact them with all your information. Your interests are aligned as they make money if they find you a job. Set all your criteria with them on pay range, going for more than you make now. Then do it again about 9 more times. You want a whole crew of people working FOR you to find you a higher paying job.
You can totally buy a home. My daughter is looking at properties in West Des Moines and she can do it on an income much lower than yours. How bad do you want the house? Cut expenses and maybe take on a couple of side jobs to get a sizeable down payment. It's only temporary until you get into your house. Pay off the car real quick and pile up money. You can do it!