19 Responses to Buying Your First Home: How to Save Up a Down Payment

    • Not bad at all. 1-2 years of saving sounds reasonable. I hate to think about how long it could take us to save up a down payment if we were making what we did a year ago…

  1. Great points, especially getting life insurance in the case one of you passes unexpectedly. Term coverage is so cheap to get and can be of real help. We have policies on both of us specifically to cover paying off the house in this event.

  2. We had been saving up money for around a year. We lived in a very cheap rental which helped! Also, the seller agreed to pay all of the closing costs which helped since they were around $4,000.

    • Nice! I’d love to buy a place in a year, but looking at 2-3 BR condos for 300-400k is a little depressing. 🙂 We’ll get there eventually!

  3. We will start saving for a down payment in January 2013. Right now we are funding our emergency fund.
    Not sure whether we are going to be the aggressive savers or the diligent planners. A down payment for us will be around $30K, plus extra padding for fixing things or buying furniture $15K. It’s a huge commitment.

    • Nice. Right now, it’s looking like 20% will be 60k for us. *sigh* I’m hoping that Mrs. 20’s keeps getting a raise so we can expedite our house savings. 🙂

  4. When I was a renter I spent less than 30% of my money in housing so I saved the difference in a downpayment fund. I also raided my vacation fund and another targeted savings account because I wanted the house more than the other goals but it all worked out and I didn’t even think about touching my emergency fund.

    • Wow – you were dedicated. I bet it paid off though. Some day I’ll have to come visit your nice place. 😉

  5. I’m in the same boat as you, but I keep my down payment funds invested in a riskier vehicle. I have it invested in VWINX, which is split about 60/40 between bonds and stocks. The fund (not my particular investment, I didn’t have it yet) didn’t get hit too terribly hard in 2008, so for now it’s a level of risk I’m comfortable with. At some point within the next year or so I’ll probably think about moving the money into a savings account for the added safety.

    In terms of saving for other goals simultaneously, I’m definitely not willing to completely sacrifice my other investments to be able to get a house a year sooner. I’m still contributing plenty to my 401k, maxing out my Roth IRA, and putting money into my FI funds. I wouldn’t feel comfortable using the majority of my savings for a down payment.

    • That is risky. Granted, I’m thinking about using a taxable investment fund for about 1/3 of my savings. I bet you know that when you’re investing you could be delaying your home purchase date, but are hoping for it to speed it up?

  6. Sounds like a very comprehensive plan, Thomas. I like how aggressive you are with the 15 year plan too.