Maybe $50,000 Was Never the Problem

By Motti Lipszyc, Realtor in Atlanta, GA

I read the piece about the couple who saved $50,000 over five years and still felt nowhere close to buying a house. I help young anash buy and sell homes, so I know that feeling well. A couple sits down in my office, tells me their number like they’re confessing something, and waits for me to say it’s not enough.

Sometimes the number isn’t the problem. It’s the math they did in their head before they ever walked into my office.

Everyone assumes you need 20% down to buy a house. Many people do put that down, and sometimes it’s the right move. But it’s not the only option. There are loans that only ask for a small fraction of that, sometimes well under half. This family already had more saved than a real down payment requires, they just didn’t realize it, and they walked in thinking they had nothing.

Five years of no vacations, no eating out, the same car with the door that only opens from the outside. Twenty percent down. Who told you that?

Sometimes the alternative isn’t a different kind of mortgage with different rules. Sometimes it’s a different address. The Rebbe wrote about something like this, in a different context. In letters to people in Eretz Yisroel, he pointed out that some were spending huge amounts of money just to stay in one expensive area, and said instead one should look at a frum community where a home costs less to buy or rent. Not every family should move, but a lot of families never even stop to ask if a less expensive neighborhood would solve the problem faster than years of saving would.

That same kind of unchecked assumption shows up in smaller ways too. Families assume there’s no help available and never check the programs that exist in Georgia, Ohio, or Pennsylvania, some worth $10,000 or more toward a down payment. Parents or in-laws might be able to help too, but most families never ask, even though a short honest conversation, even just by text, is a lot cheaper than another two years of rent. And a rentable basement or extra unit might count toward what a bank will lend, if anyone bothers to ask a lender. Every one of those is the same kind of mistake. Nobody checked.

Here’s what bothers me. We hand young anash a savings number like it’s a mitzvah, and nobody checks if the number is even right. People sit down with a lender only after they think they’re ready. That’s backwards. That conversation should happen first, not as a reward after five years of sacrifice.

What exactly are we expecting young families to do? I don’t think it’s another year of skipping pizza on Kingston. I think it’s asking a mortgage broker the question five years too early instead of five years too late.