Current Events > Do most people use money they earned themselves to buy a house?

(+) Yeah! (+)

No inheritance, no trust fund, etc.

Yes.

Yes, you just have to save. I started putting money away when I was 18 because I knew I wanted a house, bought it when I was 25.

pretzelcoatl posted...

Yes, you just have to save. I started putting money away when I was 18 because I knew I wanted a house, bought it when I was 25.

Well tell us more. What % was the down payment, cost of living of the area, etc.

most houses and other buildings are not purchased using money that the buyer earned themselves

not sure how exactly that equates to your question, but it probably means something

pretzelcoatl posted...

Yes, you just have to save. I started putting money away when I was 18 because I knew I wanted a house, bought it when I was 25.

your conclusion does not follow from your evidence

My parents gifted the closing cost for my house since it's my first but if they didn't I'd still have been able to move forward with the purchase

XxZiomaxX posted...

Well tell us more. What % was the down payment, cost of living of the area, etc.

2.7%, ~70k down payment. Price per sq foot is high but the area is walkable. Paid 10k over asking.

I did

pretzelcoatl posted...

2.7%, ~70k down payment. Price per sq foot is high but the area is walkable. Paid 10k over asking.

Your first house at 25 was $2.6 million?

Most people do yes. I had help from my aunt to cover closing costs but the entire 15k down payment, 5%, was all me at 31 years of age. Didn't move in for like 4 months though. People wanted to live there while searching for a new house. I said yes cause I didn't want the deal to fall through.

House listed at 285, had to go to 318 to get it, house was worth 400 max according to Zillow in perfect condition as of like 3 months ago. I'm assuming it went down a bit since but not much. Mortgage is currently like 45% of my income after taxes so 1950. I'm stressed bro lol.

I did. I did things in the wrong order by getting my dream car before my house, but saving for my dream car gave me the financial discipline to save enough to get my house.

yes, most people get a mortgage.

Like a suburban 4 bedroom house? Rarely nowadays. Houses are way too expensive compared to 20 years ago. Our system is now such that only people whos parents pay for their large expenses can afford them.

I still had the remnants of my college fund that was like 8-9k that I put towards my down payment. Though I also took out student loans and had paid them back out of my own earnings before I bought my house so just a matter of accounting.

I qualified for the mortgage on my own income and credit.

190k purchase price, 10% down payment

Nope. Tried to, but the banks here just made it impossible to get a loan. They'd give a pre-approval so it wasn't a credit issue, but they'd always find some ridiculously nitpicky reason to turn down any individual house.

It's kinda an open secret that the housing market in NZ is set up to primarily benefit old rich people so it's not that much of a surprise they try to avoid anyone else being able to buy a house here though.

TendoDRM posted...

Your first house at 25 was $2.6 million?

No lmao, but the down payment was ~70k

Edit: how the hell did you come up with 2.6 million?

No.
Most people take a mortgage which is borrowing money.

Seems the users so far think down payment on loan = using own money.

Is that what you meant tc?

Most will never truly own a home.
What happens is they sell first home and put that money to the next. Basically keeping a loan in perpetual state but refreshed.
This is done to move or "upgrade".

Most people use a banks money.

I saved 200k for a down payment, mostly by living frugally in a rent-controlled apartment for 10yrs, but I had no school or car debt, either.

Historically, yes
Lately, not so much

[LFAQs-redacted-quote]

Share the love, man.

I would assume that there is actual data on this

WingsOfGood posted...

No.
Most people take a mortgage which is borrowing money.

Seems the users so far think down payment on loan = using own money.

Is that what you meant tc?

Most will never truly own a home.
What happens is they sell first home and put that money to the next. Basically keeping a loan in perpetual state but refreshed.
This is done to move or "upgrade".

i would assume that most people that get a mortgage end up paying it off and owning the property eventually.

Put about 7% down on a house this year. Interest rate was about 6%, which is really high, but I'll be able to refinance later this year or early next.

NightMarishPie posted...

Put about 7% down on a house this year. Interest rate was about 6%, which is really high, but I'll be able to refinance later this year or early next.

I wouldn't count on different rate for awhile.

i think most people use the actual money they earn for personal and living things, like clothes or a tasty burger
as everyone says, they use a majority of the bank's money for a house

Probably a mix more often than not

I have a bit of generational wealth on my side so that covered basically half of the down payment and all closing costs. The earnest money deposit ($15k in my case) came from me entirely.

Anyway, house is 4BR 3.5BA and 3800 sq ft. Between the wife and I, we can handle the mortgage. Good interest rate too so we'll be here for a while.

I put a down payment of 90k, the rest was covered through a loan. I've completely paid it off, so technically I used my own money to pay for the house.

pretzelcoatl posted...

No lmao, but the down payment was ~70k

Edit: how the hell did you come up with 2.6 million?

You said 2.7% was the down payment on the house. Did you mean that was the interest rate?

I believe I put about 10k down on a 226k house on Nov 2011. Owe about 169k now and house worth around 486k today. Not bad. APR 4.25% it dipped a little lower after I bought it tho