Buying a Home with 1% Down & Other Stuff We Did While Away for a Month

In the span of 6 weeks we bought our first home, sold some of our lovely starter furniture, and launched a 5 figure product online. Oh, and we bought our home with only a 1% downpayment! I didn’t think any of it was possible 7 weeks ago. To top it all off, I just wrapped up my 7th Triathlon race this season and even pulled the trigger on hiring a coach for next season. This post details Buying a Home with a 1% downpayment and some other cool stuff we did recently, plus more on transitioning to full-time blogger.

Yep!

A lot of updates.

The most exciting one is I’ll be launching a free product on Distilled Dollar. I learned a lot from our first 5 figure product launch but this time I wanted to do one 100% for free and on the topic of frugality.

(If you’d rather see a different topic covered besides frugality, then let me know here via this link.)

You might be asking yourself now…

”How’s this guy going full-time with his blog if he’s launching free products?”

The mission for this Course list below is to have half of all course launches be free, and creating a separate list seemed the easiest way to get courses into the hands of anyone interested. If you’re curious to know more, then sign up below. If you want to help me as I build the frugality product, then the list below will be your friend.



Signing up now also guarantees you a spot to receive the frugality course for free when it does come out so you should sign up now while its hot on your mind.

Buying a Home with 1% Down

So, with all that life inspiring stuff of the way, how did we end up in a lovely home for the price of our regular rent plus only a few hundred dollars?

Buying a Home with 1% Down

The first answer is it takes time to find opportunities.

Plenty of time.

Others might translate this as it takes work but I’ll explain below.

Money doesn’t just swing itself your way on a whim. I believe money needs to be earned, just like success needs to be re-earned, just like it is each time we cross a finish line.

So, with such a large purchase on hand, I put in a lot of time, easily more than expected on purchasing not only a home, but the right home.

So, how we landed 1%:

Part of the answer is the loan ended up being a small downpayment as opposed to a traditional 20% down payment. I went into full detail before on why a low downpayment, so this article will specifically address how it was so low at 1%.

Many people are familiar with 5% loans and some may be familiar with 3.5% loans. Conventional loans can go as low as 3% and that is what we qualified for this time.

So our total down payment was 3%, but there was one final piece.

Since we are first time homebuyers and because we live where we live and because we don’t make too much money, and because blah blah…

…because of all that, we qualified for a 2% grant given to us from the City of Chicago!

3% – 2% = 1% Downpayment

The point of this whole story is to not disqualify yourself from buying a home. You might qualify before you know it. If you should buy is a different story.

Funny enough, for us, we had already placed 5% down per the seller’s request, so we ended up walking away from the closing table with cash.

When folks ask how was I able to get a 1% downpayment, it actually makes for an easy transition opportunity into telling them I’m gonna be a full-time personal finance blogger.

I don’t expect everyone would have put the time and effort to find each opportunity, but we’re glad we were able to move in this year instead of waiting potentially years to save up to a larger downpayment.

Do you have any great stories from yourself or people you know on buying a home with a low downpayment? I’ve heard plenty of stories from a decade back on low downpayments, but I’m curious to hear more on a recent one.

-Matt

P.S. Thanks to all who listen as the podcast nears the three-quarters-of-a-million mark in downloads. Here’s a recent podcast episode that was really popular:

8 comments… add one
  • Mrs. Adventure Rich Sep 14, 2017, 5:51 am

    We didn’t hit the 20% mark, but we put 15% down on our home when we purchased it about a year ago. The big reason was unexpected expenses in the purchasing process. The owner was selling the house himself and refused to pay the buyer realtor fee, so we had to take that. We went back and forth with putting 15% or 20% down, but settled on 15% so we had a bit of buffer money for emergencies and other needs. It was the right decision for us, but I can’t wait to get that PMI off our back (mid-next year at this rate).

    • Distilled Dollar Sep 14, 2017, 8:11 am

      Nice! With 15% down and 20% to eliminate PMI – it makes sense to eliminate it asap. I haven’t put together an expected timeline when we will knock out the PMI- but at only $80/month, we are focusing on the higher rate student loans first.

  • Mrs. Picky Pincher Sep 14, 2017, 7:54 am

    Well dang, that’s awesome work with the house! Congrats! I wish we had subsidized down payments. 😛 We qualified for an FHA loan, which allowed us to put down a smaller down payment (but at the cost of mortgage insurance for the bank. Boo). But if we had to save up the 20% for a conventional, we wouldn’t have bought a house for at least another two years. And since we plan to pay off the mortgage in a few years anyway, we didn’t mind having the PMI.

    • Distilled Dollar Sep 14, 2017, 8:09 am

      Well said and same here. Our PMI costs us less than $80 a month whereas it may have taken years to qualify based on a. 20%. The kicker of course is paying off the mortgage early (if that’s in the cards).

  • Ms. Montana Sep 14, 2017, 8:36 am

    Way to go with the course launch! You are off and running. I’m in the middle of a beta right now and did a soft launch on another one. I haven’t done a free one yet, but love the idea!

    • Distilled Dollar Sep 14, 2017, 9:30 am

      Awesome! I’m convinced products are the easiest and fastest way for people to jump start and really excel in an area. Real excited about the products on the horizon too!

  • T@TheTirelessWorker.com Sep 15, 2017, 7:06 am

    Sadly, I have no downpayment stories to share. House prices are typically quite high where I’m from. But wow, you are really hustling! With a course already out and a new one in the pipeline. I can’t wait to hear how you are doing all this while going full-time!

  • Joe @ Average Joe Finance Sep 21, 2017, 7:22 pm

    Wow! Seven triathlons in a year is amazing. I just completed my first this year and it was hard enough. I couldn’t imagine doing 7. Good luck in moving to full-time blogging, it will be nice to avoid busy season.

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