Anyone help with down payments?

amother

Dodgerblue

Thu, Jun 06 2019, 9:59 am

My parents and in laws helped on our second home. Our small starter home we paid for ourselves. It was not that expensive, and we didn’t have many expenses then. Unfortunately we did not make much money if anything when we sold, because we bought at the height of the market and probably overpaid too. But we really needed to move for various reasons.

Be careful borrowing money though. My in laws came over to us one day and asked for all the money back to be paid right away. We ended up having to borrow to pay it back. It wasn’t fun. My parents are very different and gave us the money with the possibility of paying back one day if we can afford it. I’m not used to the way my in laws are, and wasn’t expecting this.

amother

Coffee

Thu, Jun 06 2019, 9:01 pm

amother [ Dodgerblue ] wrote:

Be careful borrowing money though. My in laws came over to us one day and asked for all the money back to be paid right away. We ended up having to borrow to pay it back. It wasn’t fun. My parents are very different and gave us the money with the possibility of paying back one day if we can afford it. I’m not used to the way my in laws are, and wasn’t expecting this.

We outlined the terms of the loan in the agreement. We gave my brother ten years to pay it back and he agreed to pay X amount every month. Boruch Hashem all the payments have been on time.

amother

Yellow

Thu, Jun 06 2019, 11:15 pm

amother [ Coffee ] wrote:

We gave an interest free loan to my brother for the down payment on his house. He signed a Heter Iska and some other document. Boruch Hashem I trust my brother. My dh's friend asked for a similar loan. We had bad experiences with him in the past (also a loan) so we didn't agree to it.

We outlined the terms of the loan in the agreement. We gave my brother ten years to pay it back and he agreed to pay X amount every month. Boruch Hashem all the payments have been on time.

.
I'm glad this worked out, but banks generally don't want the down payment to come from borrowed money. It means the buyers aren't really able to afford the house and have a higher debt load than recommended. As it is, banks assume that you can afford to spend close to a third of monthly income on housing. This is quite high (and maybe unaffordable) for a family paying tuition.

baby12x

Fri, Jun 07 2019, 5:59 am

amother [ Teal ] wrote:

Can you get pre qualified without much in savings? Can anyone give steps to home buying for dummies, especially with minimal down payment? Or maybe tapping into retirement funds?

DO NOT TAP INTO RETIREMENT FUNDS
A house is nice. For some it can be a great financial move. For some, its not. We have to stop the thinking that owning a house is the be all and end all of financial security.
Dont tap into retirement to buy a house. Save for many years before doing that

SacN

Fri, Jun 07 2019, 11:24 am

Quote:

Good old fashioned budgeting to save for a downpayment

That's not quite fair. I live in Israel. Here, minimum down is 30%. We have student loans (in usd) and two full time Israeli incomes.
3 bedroom apartments where I live (and can't move from because the our commutes to work will be more than 3 hours total per day each) cost 1.6 million sheckels.
30% of that is almost 500k sheckels.
That's an insane amount to put away (on top of our mandatory pension funds) . Say we can put away 2k per month. (as if, but just say). How many years will it take me to save for a downpayment? 20?

So yes, inheritance, family help, lawsuits, etc. Or getting married later.

It's not always so simple.

amother

Azure

Fri, Jun 07 2019, 12:00 pm

SacN wrote:

Quote:

Good old fashioned budgeting to save for a downpayment

Yes, I agree. I budget so that I can afford my basics and me n dh earn around 110k combined. So, even if we put $100 a month away, it'll take a long time to save a downpayment. But, it seems majority of my kids classmates live in regular homes, so I dont know how they managed...unless they are earning much more money and then put aside a lot for a downpayment. But, for people earning very little money and large families...like the wife is a secretary with rebbe dh how did they buy their homes?? I dont know their secrets...and, even if someone only put 3% down, then the mortgage is higher each month, so one needs to afford it....

So,op, I have the same question.

amother

Amber

Fri, Jun 07 2019, 12:38 pm

amother [ Azure ] wrote:

If you are in NY, you can check to see who owns the house and possibly how much money they put down (which would be based on how much their mortgage is). I found it interesting that someone who presented themselves as being rich did not even own the house they lived in so people are dishonest and do present themselves in manners that are not based in reality and you wont know the truth for sure without doing research first.

amother

Mint

Fri, Jun 07 2019, 7:00 pm

amother [ Amber ] wrote:

Not owning a house doesn't mean not rich. Not everyone thinks that 2019 property is a good investment (use of capital).

amother

Gold

Mon, Jun 10 2019, 2:41 am

amother [ Azure ] wrote:

If owning is important to you. Then you can buy in the periphery for 500000 shekel. Use the rent to cover the mortgage. Prices should eventually go up and then you can build up capital. Will still take time but prob less than twenty years.

amother

Pumpkin

Mon, Jun 10 2019, 2:59 am

We bought in Israel on paper. I don't recommend it for most people because it's going to be about 10 years from when we gave our first payment until we can move in, even though they promised us it wouldn't be more than 3 years.

The good part about it is that we did not have to give the full down payment at once and we were able to pay it out slowly over the years.
We borrowed money from gemachs and from interest-free credit cards and we paid them back monthly.
Now all we have left is the mortgage.

SacN

Mon, Jun 10 2019, 12:42 pm

Quote:

amother

Pumpkin

Mon, Jun 10 2019, 1:40 pm

SacN - look into buying on paper in an area that already looks good.

Many of the people who first bought with me are selling for a very nice profit and buying where they currently live.

If you don't mind waiting 10 years until it's ready, it can be paid off slowly since you pay per phase and there is no huge down payment at once.

Also, look into gemachs and get on their waiting lists now. There can be a year wait but then you can borrow around $10,000 and they just take the money by horaat keva each month, until it's paid off - interest free.

amother

Cerise

Mon, Jun 10 2019, 9:46 pm

amother [ Coffee ] wrote:

Why did you need a heter iska if the loan was interest free?

amother

Gold

Mon, Jun 10 2019, 11:53 pm

Also sounds nice in theory. Except that longitudinal analysis shows that this does not always pay off more than a diversified investment portfolio. Prices on my supposed investment property will go up - but so will housing prices for the home I want to live in, in equal measure.

I work 45 hours+. So does my husband. I'm going to scrimp and save to buy somewhere 45 minutes from my home (and an hour 45 from work) so that I can wonder how I'm going to pay the mortgage when I have 3 months between tenants? And make time to go down to check on maintenance and repairs? And upgrade the electric (since it's a cheap old building from the 60s) and replace the dud? And then fix it when my tenants trash it, and show it to new tenants when the old ones decide to buy their own?
We're not talking owning down the block, and renting and maintaining is a huge hassle and expense. There are also few 500k apartments around--Harish is more, sderot is more, the kryaot are more...

It's true, bezrat Hashem one day I'll have parnassa to buy my own home. Hashem can do anything. I can have minor investments pay off big time or my keren hishalmut will pay off big or one of us will inherent more than we ever expected or please Hashem our student loans will be forgiven somehow.
But all pi teva, that's not the normal way of things.[/quote]

You are correct there are risks involved but the risks are lower than you make out.
If you buy in a charadi neighborhood a decent place the chance of not having tenants is extremely low. You may also need an agent to rent it out for you. The charadi neighborhoods in Teveriya has recently been amazing investment opportunity. You can get a nice place for 600000 shekel.
I actually did this and made enough to sell and have a down payment where I wanted to live. Israeli charadim buy property as soon as they can because all their kids need somewhere to live. And the community is growing at a crazy rate, housing is never going to keep up.
Having said that things are not what they were ten years ago so maybe prices won't rise as much as they have in the past....but I'm sure there are still opportunities to pick a winner..... But yes there is risk...