how do people have so much money in the bank??

We just lost out on the 6th house we put an offer on. Our agent says it's because we have a FHA loan and we only plan on putting down 5%. DH is in finance, ran all the numbers, he knows we can afford a house for the price range we're looking at but we don't have $100k in the bank to put as a down payment. Who does?? I have no idea how we're supposed to come up with that kind of money. Even if we put 10% down it completely depletes our bank accounts and we'll have no money to fix anything up or buy furniture.

Re: how do people have so much money in the bank??

We lived in a small one-bedroom apartment with cheap rent for five years, that's how we did it.

Re: how do people have so much money in the bank??

I haven't had anyone plan to put more then 3.5% down (except for 1 house I sold cash and I know his Dad gave him the money)

everyone I have been dealing with is a first time home buyer

Re: how do people have so much money in the bank??

Re: how do people have so much money in the bank??

could it be that where you are looking is a "trade up" area or price range?

Re: how do people have so much money in the bank??

You are going to have to pay more and outbid somebody coming in with 100k.

If a seller sees your offer for say 400k and another offer for 398k with 100k down... that seller may very well take the 398k offer since it's a more secure loan.

Many people have money saved either from renting cheap (or living with family and paying no rent).

Or it's somebody like me who built up their wealth from prior investments, bought and sold properties in the past for profit, etc.

I know for the house I bought, after we had a verbal acceptance, two other offers came in more... but the sellers knew they had a sure-fire deal with me with the amount of cash I was putting down.

I also was not eligable for the first time homebuyers credit so the seller didn't feel "pressured" to leave by a certain date. The other two higher offers were first time homebuyers that wanted to close by the end of November.

Re: how do people have so much money in the bank??

We had a decent amount of $$$ that we made from our wedding, we paid cash for our wedding so all the gifts were put towards savings. Also my fil gave us some money to add to our down payment. I think we put $75,000 down.

Re: how do people have so much money in the bank??

Re: how do people have so much money in the bank??

There are still people who have money from equity in previous homes, people who inherited, people who had a "good year" in whatever it is that they do, etc. Trust me, though, for every seller there is not a buyer who is in better shape than you are. It only appears that way momentarily . . the tide could turn for you even in a day or so or over the course of one weekend.

Re: how do people have so much money in the bank??

I just thought of another group of people that have a large down payment

people who have been waiting the market out....I just thought of someone I know that is older for a first time buyer- was planning on buying back in 2005 - but got fustrated with the prices and just waited it out

so that's 5 more years of savings....

plus all the people who lived with family

or got money from their parents

you get a house....there are so many out there! look at houses that have been on the market longer

Re: how do people have so much money in the bank??

we did an FHA and got out bid once but ended up with an even better house so i think things have a way of working out.....good luck!

Re: how do people have so much money in the bank??

Re: how do people have so much money in the bank??

Re: how do people have so much money in the bank??

Re: how do people have so much money in the bank??

We closed on our house in May and at the time I didn't realize how attractive we were as buyers with 20% down, but the more I read, the more I realize that's rare and that realtors do view buyers with 20% down as more of a sure-thing.

If I could do it over again, I would have lowered our final offer a little and stressed the 20% down angle more.

Message edited 2/15/2010 7:31:45 PM.

Re: how do people have so much money in the bank??

We have a good amount saved up, not $100,000. we are using:

-Wedding money
-Renting for a few years
-Putting a good amount of money
away each month.

My REA said that people who put a bigger Down Payment have a better chance of getting a loan because it won't be too much of a loan then those who are putting a lower Down Payment. Buyers want to make sure their house sells smoothly.

Good Luck!

Re: how do people have so much money in the bank??

Posted by Maybe-A-Baby10

We have a good amount saved up, not $100,000. we are using:

-Wedding money
-Renting for a few years
-Putting a good amount of money
away each month.

My REA said that people who put a bigger Down Payment have a better chance of getting a loan because it won't be too much of a loan then those who are putting a lower Down Payment. Buyers want to make sure their house sells smoothly.

Good Luck!

Re: how do people have so much money in the bank??

some people save a decent amount of money every month. We live off one salary with money left over. The 2nd salary is saved completely.

But no matter how good of a saver you are there is always competition. We recently saw a house we loved and were going to put 60% down, but they accepted an all-cash offer for full asking price.

Re: how do people have so much money in the bank??

Re: how do people have so much money in the bank??

People save my living at home, perhaps they had equity in their previous home.

Also people may be older then you and your DH and have had longer to save.

And there are those who have parents that give them big downpayments as well.

But not all buyers have these situations and your luck will change...I hope you are able to get your home soon

Re: how do people have so much money in the bank??

im sorry jess!!! we lost out on 10 houses!!! yes 10! it was absoultely heart breaking. we have some $$ in the bank but not as much as others and we also are doing FHA we lost out on 2 because people were paying ALLL cash (i cant even imagine) and the rest we lost out just by a few thousand! we just found the perfect house and within 30 min they accepted our offer and it was ours! that fast! everyone always said when you find the right house it will just go so smoothly.. and so far so good!

hang in there i know how discouraging it is and how disapointed i got everytime it didnt work out!

Re: how do people have so much money in the bank??

Jess we had a 20% downpayment and we still lost out b/c people were making CASH offers on houses. We are down in FL so prices are less which means downpayments are less but I know how frustrating it can be when you lose out on houses b/c you don't have enough cash - very frustrating...

If we had to save 20% for a house in NY we'd be saving for a really really long time In FL it's easier to come up with a downpayment b/c the houses are less expensive....

Don't worry you'll get something!

Re: how do people have so much money in the bank??

We did an FHA and put down 5% at contract but only put 3.5% for the mortgage....it gave the seller just a bit more if something should happen....you get the 1.5% back at the closing table and can then just put it towards closing costs.

Just cause you put more down at contract doesnt mean you have to put it all down for the mortgage as long as the bank is ok with the loan amount and downpayment.

And our FHA closed in 45 days and the actual closing was less than an hour....

Not really much different than a conventional loan

Re: how do people have so much money in the bank??

thanks for all your responses, they were really helpful! I guess we keep searching. We're considering checking out other neighborhoods we didn't necessarily consider before.

Nik - my parents are trying to buy in florida and they mentioned there are a ton of all cash buyers right now. We're seriously considering moving to NC because it's cheaper to live down there.

Re: how do people have so much money in the bank??