Reply #30: First-time homebuyer (condo) here in California. My wife and I waited to [View All]

[coalition_unwilling]

buy until monthly rent was more than P&I + HOA dues. This happened in April 2009 and, by that time, prices in our building had declined by 50% from their bubble peaks. Even so, a 20% downpayment would have required us to bring roughly $50K to the table. $50K we did not have, even though by this point monthly mortgage + HOA were well below monthly rent for equivalent units. Fortunatly, the FHA has loans for first-time homebuyers that require only 5% down for a 30-year fixed. This meant we only had to put down $10K, a stretch for us but softened somewhat by the first-time homebuyer's credit.

If we had to amass a 20% down payment, my wife and I would still be renters. We love our condo and hope to never return to renting. We don't care if we make a profit off of our home and will be happy to live here for the rest of our lives. But we were sick of shitty landlords and of rents going up every year, even in supposedly rent-controlled buildings.

I say this because saving even $5K takes a monumental effort. Saving $50K to get a down payment would take an eternity. It can be done, I suppose, but no one ever showed me how to do it nor that it was possible for someone in my circumstances.