S/O Borrowing for down payment

amother

Apricot

Sun, Jan 31 2021, 3:58 am

amother [ Copper ] wrote:

Where in the world do you see that he felt "entitled" to my money?

I live in a community where there is a gmach and chesed organizations everywhere. If chas vshalom something were to happen, I know my community would be there for me. Everyone contributes in the way that they can. He asked. Dh could've said no. Asking for help does not make youu entitled.

I also live in a community with chessed organizations, and I'm sure people use them. That's very different from approaching an individual for a loan.

Obviously, a person who's in need has no choice. Buying a house is often a solid investment. But is it a need that others should support? That's a tough argument to make.

amother

Cerise

Sun, Jan 31 2021, 4:10 am

Here's our situation:
We're currently saving up for a down payment. We need to move from our tiny basement apt but a larger rental will be more expensive than monthly mortgage payments. So we're staying put for another while and putting the money we're saving by staying in our outgrown quarters into savings. Once we've saved up half we'll feel comfortable borrowing the rest from family and gemachim. Home prices are only going up, we really need to move and it doesn't make sense for us to be paying crazy rent every month instead of using less to pay off a mortgage and use the difference to pay off private loans.
You might disagree with this method but please don't call me entitled or irresponsible

amother

Coral

Sun, Jan 31 2021, 4:40 am

I don't think the person who requests a down payment loan is irresponsible.
I think the person who loans out the money and isnt able to be mevater the money if the borrower can't repay is irresponsible.

We loan out money to people, it's all written up in a shtar, and when they inevitably can't repay we add that amount to the ma'aser. It's no longer a loan, it's tzeddakah.

amother

Puce

Sun, Jan 31 2021, 5:22 am

My parents gave us $25k towards the down payment.
We're in Israel where we have to give about 40% down so we needed a lot more. We had $25k in savings and we borrowed about $50k from gemachs and interest free credit cards (which we flipped to a new interest free credit card every 15-18 months). I know people here are very against using credit cards but if you know how to use them and you are responsible, it can work out very well. We fully paid them off after a couple of years without ever paying interest.

We bought in a newer cheaper neighborhood so our mortgage, plus paying back the loans was less than our rent in our previous apt.

amother

Lemon

Sun, Jan 31 2021, 6:21 am

We live in an area where renting is exorbitantly expensive and hard to find. We throw away massive amounts of money on rent. If we were to buy a house, our mortgage would be significantly lower than what we're paying in rent. However, we don't have enough savings to put down for a down payment. If we were to beg and borrow money from relatives, along with what we have in savings, we would be able to put down a down payment and buy. There would also be enough money for us to pay the loans back as well as the mortgage.
To give a made up sum. If we were paying 2000 in rent (we're paying more in reality), and if we owned our own house, we would only be paying 1000 each month, that's another thousand of money to pay back the loans.

Teomima

Sun, Jan 31 2021, 6:32 am

amother [ Lemon ] wrote:

This makes sense. However, as a homeowner, I can tell you there are also so many added hidden expenses that even when mortgage it's less than rent (and I understand that logic, it was the same for us when we bought. We pay a lot less for our mortgage than we would renting), you don't always have that difference to pocket/use to pay back a loan.

For starters, just the process of buying is expensive. There are thousands in various fees, plus the costs of moving. Then if anything breaks or you need to pay for a service (say an exterminator), the repairs and costs are entirely on you. Some of these expenses can be huge and cost months worth of savings to repair.

I'm not saying it's not possible to follow through on your plan, I'm just saying it's naive to assume you'll have that difference available every month to pay back the loans.

amother

Crimson

Sun, Jan 31 2021, 6:47 am

$ fron my in -laws + $ from my parents + my savings + wedding money. Here in israel you need to put down 30%. Thank g-d our parents pushed us to buy in the periphery when we got married 6 years ago even though we renting jerusalem. We actually intend to move where we bought when we can (our careers are in fields that have more opportunities in the j'lem/ tlv area when starting out, but have opportunities where we bought once we have experience)

Prices in Israel have gone up so much that if we would have waited to figure out where we want to be our 50k $ down payment wouldn't be able to get us anything bigger then a 2 bedroom in an 8 floor walk up if we waited (instead of a 3 bedroom with a garden)... The rent we get is 1,000$ higher a month then our mortgage, and we have that in a seperate account for things that come up when owning a home.

From my experience in most circles young couples in israel get help for the down payment if they are buying close to the center. This is for both secular, religious and charedi famlies . It is very difficult to
come up with 30% while paying the exorbitant rents of the center without help.

Just One

Sun, Jan 31 2021, 8:54 am

amother [ Crimson ] wrote:

No more exorbitant than any of us living in or near any big urban center. What I don't understand is how do the parents afford it?

byisrael

Sun, Jan 31 2021, 9:22 am

Just One wrote:

No more exorbitant than any of us living in or near any big urban center. What I don't understand is how do the parents afford it?

It is more expensive because while the prices are comparable the salaries are not so the percentage of the salaries are not. Compare Israel median income to US median income

In the USA you do not need to put down 30-40%. When I say near the center I mean within a 1 hour commute of tlv. You can buy a 2 bed starter house in Passaic for 350,000$ (according to zillow). There is no where you can buy a 2 bed apartment an our from tlv for 1,120,000 nis

There are very few (if any) options for long term rental contracts. This means moving every few years.

Because of the housing shortage the prices keep skyrocketing and most of the land is owned by the govt / not zoned for housing and is stuck in bureaucratic red tape which means the shortage is only getting worse. Most of the land over the green line that is frozen

Most parents try to help thier kids out so they can get in the housing market b4 it becomes unattainable. Hopefully eventually the goverment will deal withthe housing problem. So far for 10 years various people have tried an failed (lapid. kachlon...)