Daniel saved $26,000 for a down payment. Now he needs to budget for the rest
Age: 23
Location: Virginia Beach, Va.
Profession: Transportation analyst
Daniel Markham's new three-bedroom townhouse still smells like fresh paint. He spent three days layering coats of tan, brick red and greyish-green on the interior walls -- just one of several D.I.Y. projects he's tackled to cut costs. Still reeling from the $26,000 downpayment, Daniel's not ready to shell out for painters just yet.
After all, saving up all that cash was a major feat. Daniel, 23, lived at his parents' place for a year to save the 10 percent he needed to buy the $256,500 home. (He bought it at a 5.5 percent interest rate, but with a little extra help from the U.S. government's $8,000 first-time homebuyer credit.) "I'm happy to be where I am," he says. "It is scary, though, to think I'm responsible for a house!"
It's no small charge, either. Now Daniel's responsible for a $1,650 monthly mortgage payment, plus the $3,000 loan he got for new appliances and the $1,800 he charged to his his Lowe's credit card for ceiling fans, pendant lights, wooden blinds and buckets of that colorful paint. His $3,400 monthly income will cover all that, including another $83 for the cable bill and a few hundred a month for utilities. But it'll take him a while to rebuild his cushion. "I'll be lucky if I save $500 a month," he says.
Daniel, who works as a transportation analyst for a private firm in Virginia Beach, says he'd like to put more of his paycheck in his savings account. He’s also got his eyes on a new car in another year or two—but before that, he needs to pay off loans and offset the recent purchases. A new roommate pays $500 in rent and splits the cost of utilities, and Daniel's counting on a hefty year-end bonus and the $8,000 tax credit to help with his debts and start his new-car fund. The realities of home ownership are settling in slowly, he says, but "it's the best feeling. I love it."
More on mortgage savings:
- Don't rush to pay off that mortgage
- 8 big mortgage mistakes and how to avoid them
- Why I'm overpaying my mortgage every month
- When to walk away from a mortgage
- 10 things that can kill a home loan
