Pinching Pennies To Save Up for a Down Payment

We (double income no kids) spent years looking at Manhattan and Brooklyn real estate listings trying to imagine how we would ever save a 20% downpayment and still have the astronomical savings required by most co-ops, which were often as high or higher than the 20% downpayment. I couldn’t imagine how we, or anyone like us (people without help from family), could do it. Then the emerging condo market came along which seems to to have helped many people get into the market, but it has also brought a lot of $1M per sq. foot apartments into previously “affordable” Brooklyn.

We just waited it out until we could afford to buy. I used to worry about how high the market would climb while we saved, but it’s not something you can control so you just have to keep your head down and keep saving. We were finally able to buy this year with our retirement savings untouched and a decent cushion left in the bank. I’m glad we didn’t overreach a few years ago just to get into the market, even if we could have gotten more for our money. Owning is too scary if you are stretched too thin, especially without a parents who can provide a financial safety net.

For those who question why homeownership is worth it, it definitely has nothing to do with being able to put nails in your walls without worry about future spackling. When the goverment is willing to essentially finance your home purchase with generous tax deductions based on your mortgage interest, you truly can’t afford to stay out of the market forever. Before we bought, I was paying well over 1/3 of my paycheck in taxes every week with write offs and maximum deductions and come April I always had more to pay. Next spring we will be getting healthy tax returns that we can invest. And we’re essentially paying ourselves when we pay our mortgage rather sending our hand earned money to our old slum landlord with no return other than a temporary roof over our heads.

I’ve earned between 100k and 400k a year for over 10 years now, but not consumed like my peers, and I’ve saved up over six figures during that time, of after-tax earnings. No windfalls. No checks from daddy. No booming mutual fund that I just picked randomly six years ago.

But I *still* cannot really _afford_ to buy a brownstone in the slope. The mortgage and yearly running costs are just too high.

Maybe I’m wrong but I think my level of savings are extraordinarily high relative to my income – which isn’t too shabby as well.

Without family, or $ luck, the vast majority of buyers in new york are in the same boat as the couples in that story.

Wall street over-compensates a lot of people, yes, but not everyone is 30 and works for goldman.

i wouldn’t admonish anyone for accepting a gift from their parents for an apartment or house anymore than i would someone who had their college tuition paid by their parents. i personally went to college and grad school for free on full scholarships, and then last year when the time came to buy an apartment in park slope, my parents offered to help out.

they had saved big bucks from my college days.

SO WHAT??? to quote another poster.

i appreciate those who save and i appreciate those who are lucky to have their parents help out.

i don’t understand how some people aren’t able to take a look at themselves and see how bitterness and jealousy is consuming their lives.

Hey! What’s the point of living on 2 dollar chickens and coca cola just for the sake of owning? Why not rent a place, go to the movies and buy a large popcorn while you’re at it? Then when you get a couple of free days, rent a car, drive down to Puerto Rico, and live on the beach drinking fruit juice and eating fried crabs! I mean, it sounds like such a nicer life than living like a Trappist just so you can put nails in your wall without worrying about your spackling abilities at a later date. Three cheers for the present and for not jumping on what all the adults around you say you SHOULD do.