How are we supposed to save $40,000 for a down payment?

Q? How do we buy a house? Seriously

realtor bob gordon circa 1980s
Future Boulder Realtor Bob Gordon invents the Selfie in 1980’s

Thank you for asking that question. It got me thinking. How truly do you save up an enormous amount of money and put yourself in a position to buy a home?

What are the steps you take to be ready to own your own place in a year, two years, five?

If it seemed difficult to me to emulate my parents when I started out in the 1990’s, it must seem insurmountable for you in today’s crazy multiple-offer, Colorado is the center-of-the-universe culture.

First Time Home Buyers: Have Hope!

Have hope. First, I’m here to help. Sincerely, I will do everything I can to help you accomplish your goal and get into a home of your own.

There are loads of resources out there. From family members who can co-sign a mortgage or gift a down payment to fantastic programs for people just like you to get into a house for as little as a thousand bucks.

True story. I just helped Adam, a Millennial home buyer. Read the blog on his first home purchase to get a sense of what happens when you are really actively trying to buy.

Talk to a Trusted Mortgage Professional

Ananda Lantaff Mutual Security Mortgage
My friend Ananda posing alongside the Tebo Car Collection.  He has great advice and programs for Boulder first time home buyers.

But, before you get there, what are some long term planning steps?

Odd as it sounds, speak to a mortgage lender now, today. Even if you have a bankruptcy in your recent past. Or are buried under a mountain of credit card bills. Or just graduated college with an amazing degree in something you are passionate about, but now are finding there are few jobs for that skill set.  Or are doing something completely different or your parents don’t understand your career.

Mortgage Lenders Know How To Qualify For a Home Mortgage

Speaking with a mortgage lender accomplishes a few things. You find out where you are in terms of ability. You get a clear idea of how wonderful or truly sucky your credit score is. And some actionable items to improve your credit. 

And mortgage lenders will give you different advice than debt counselors or financial planners.  A good mortgage banker will illuminate how to accomplish one goal: home ownership.

Funny but true, more often than not a client tells me, “I have terrible credit.”

And come to find out, their score is sufficient for an FHA home mortgage. Or, a client thinks, “I don’t have the income to support the home purchase I want.” But then, we discover that buyer has amazing credit or assets or an aunt that wants to cosign. Heck, I’ve even had a client find an ex-fiancee who was willing to cosign her mortgage.

Subsequently, you just never know until you start the process.

Talk About the Home Buying Process With A Realtor

So, you chat with a lender and share that information with a trusted real estate advisor. Maybe at this point you are working on your credit. And saving some money at the same time.

Or perhaps you are skip the wait/cut line and just get a cosigner. Sometimes a client will get another family member to buy their dream home and then rent it.

bob gordon and john arnold and beth & frank in a real estate closing
John A. had great mortgage program – chafa – to assist Beth and Frank with their first home purchase.  Understanding your home financing is an important step in the 10 Things to consider when buying your first home

This is actually a strategy many parents of CU Boulder students pursue. Their child has a safe, affordable home for 3 to 5 years of college. Mom and Dad have an investment and tax shelter.

Its also a strategy immigrants to America pursue. When one member of a family is established with citizenship and a hardworking fellow family member has the assets for the down payment, but lacks the social security number/established credit to qualify for a mortgage.

Home Buying Worst Case Scenario

But lets just imagine even the worst case scenario. Its all on you. Well then, step one is getting a good handle on your debt, credit score and savings.

Step two, planning for your eventual home purchase. If your income is low, there is the Boulder Permanently Affordable program. There is also the idea of “drive til you qualify.” As in, maybe you want to be in Boulder but to have a single family home backing to open space you instead move to Lafayette (been there, done that).

Step three, the down payment. For entry level homes, there are great programs. Some through lenders – down payment assistance; others through government agencies – Chafa. There is even a mortgage where you can borrow the money you need to fix up your new home…the 203K program. Contrary to popular belief (misconception), you don’t need a forty thousand dollar down payment. For as little as a thousand bucks, you can get into your new home via Chafa.

Step four. Patience. Time your lease so you can start the home search when you are four to six months from the end of the lease. This way you can avoid breaking a lease or having two pesky payments. Stay in touch with that real estate agent. Look at homes online and get an idea of how far you are willing to commute, what’s a dream feature and what’s a must have.

The reality is, even if you had a bankruptcy yesterday, there are mortgage options out there to buy a home. Let’s have a coffee and talk about your home buying adventure! ~ Bob

an americano coffee at louisville pauls coffee
I’m all for meeting for coffee and talking about your home buying plans.  Heck, we can meet for coffee and just hang out.


3 thoughts on “How are we supposed to save $40,000 for a down payment?”

  1. Great blog Bob. As a mortgage lender, I agree with everything you talk about. Mortgage lenders and realtors are the experts in the field. We will review all options and scenarios in order to help people buy a home. If they just aren’t where they need to be, we will advise and out a plan in place to help them achieve their goal.


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