Lately I am meeting people who work hard but aren’t saving anything – and they want to buy a a house.

Let me tell you:  It doesn’t work that way.  Few important things in life are that easy, actually.

If you want to buy a home in Silicon Valley, you have to embrace the “new frugality” and start saving your money for the down payment, the closing costs, and improvements you’ll want to do to the property.  Real estate isn’t cheap (you may have noticed) and the taxes, insurance and upkeep will require that you have a reserve account to pay these things after you purchase the townhouse, condo or house.

How much should you be saving?  As much as humanely possible.  Yes, that means probably giving up a lot of ski trips in winter, lavish nights out on the weekends, dinners and maybe even coffees out.  When you do buy a house, you will probably be spending 33% of your gross income (total, pre-tax) on the property (mortgage, interest, taxes and insurance).   Try living on what’s left now – see how you do.  If you can’t live on just 67% of your gross income, you might reconsider whether you can or want to sacrifice that much to purchase a home here in Santa Clara County.

Yes, there are lower down payment options like FHA backed financing, but with a tiny downpayment (6% or so) you will have very high payments and to top that off, your interest rate will be higher.

If you really want to buy a house, you need to sacrifice and save.  Aim at 25% down so you can afford to fix it once you’re in and pay lower interest rates.  Or if FHA is the way you want to go, more like 8%.  Save, save, save.

 

Translation

by Transposh - translation plugin for wordpress
Mary Pope-Handy
Realtor
ABR, CIPS, CRS, SRES
Sereno Group Real Estate
214 Los Gatos-Saratoga Rd
Los Gatos, CA 95030
408 204-7673
Mary (at) PopeHandy.com
License# 01153805


Selling homes in
Silicon Valley:
Santa Clara County,
San Mateo County, and
Santa Cruz County.
:
Special focus on:
San Jose, Los Gatos,
Saratoga, Campbell,
Almaden Valley,
Cambrian Park.
Let’s Connect
Find Mary on FacebookFollow Mary on Twitter
RSS FeedFollow Mary on YouTube

Please see more icons
at the bottom of the page.

The real estate search
Use the widget below to browse properties which are for sale, under contract (pending) or sold. Want to view only homes which are available now? Use the "find a home" link on the menu above (next to the "home" button).
Mary’s other sites & blogs
Valley Of Hearts Delight
Santa Clara County Real Estate,
with an interest in history

Move2SiliconValley.com
Silicon Valley relocation info

popehandy.com
Silicon Valley real estate,
focus on home selling

Silicon Valley Real Estate Report
Silicon Valley real estate
market trends & statistics
Mary’s Blog Awards
Top 25 real estate blogs 2016
2016: Personal Income's list of top 25 real estate blogs.


Best Realtor blog award
2016: Coastal Group OC's list of best Realtor blogs


The 2009 Sellsius list of top 12 women real estate bloggers
2009: Sellsius list of top
12 women real estate bloggers


Mary Pope-Handy's Live in Los Gatos blog won the 2007 Project Blogger contest, sponsored by Inman News and Active Rain

2007: Mary Pope-Handy and Frances Flynn Thorsen win the Project Blogger Contest for Mary's Live in Los Gatos blog. The contest was sponsored by
Active Rain and Inman News.


Non blog award


Best real estate agent in Silicon Valley from the San Jose Mercury News poll of readers in 2011
"Best real estate agent
in Silicon Valley"

2011 readers' poll,
San Jose Mercury News

Categories
Site Statistics
  • Users online: 4 
  • Visitors today : 1,133
  • Page views today : 2,994