Buying A $599K Townhouse In Los Angeles | Millennial Mortgage

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Jenelle Yee and Ver Starr, both 28, put $60,000 down on their $599,000 townhouse. They currently pay $3,850 per month, which includes a $2,663 mortgage payment and nearly $700 in property taxes. That's more than what they were paying in rent, but it's worth it, says Starr: "We're building our equity in something that we own." Plus, it's an upgrade from their previous 2-bedroom apartment and a space where they plan to live when they start a family.

This is the latest installment of Millennial Mortgage, which profiles first-time buyers across the U.S. and details how they purchased their homes.

Read more about Jenelle and Ver’s home buying process here: https://cnb.cx/2YN5sKD

Two years ago, Ver Starr decided to calculate how much rent he and his fiancee, Jenelle Yee, had paid over the past four years they lived together.

"It was upwards of six figures," he tells CNBC Make It. "And that just didn't sit easy with me."

That's when the Los Angeles-based couple, now 28, started saving money specifically for a down payment. They already were setting aside a significant portion of their income: Starr, a software engineer, was contributing 25% of his paycheck to retirement accounts, while Yee, a product manager, was putting about 90% of her income in high-yield savings accounts, retirement accounts and index funds. She already had $70,000 in savings that she'd been building up since she started working at age 13.

Starr, who is still paying off student loans, didn't start saving so aggressively until three years ago, when the couple moved from Austin to LA and they saw their rent increase. When they decided to buy a home, he didn't have much savings outside of his retirement accounts, so he found ways to cut back in order to contribute more to their down payment. He started small, by breaking his Starbucks habit: "I don't buy a $5.25 grande cappuccino anymore. I make my own cold brew for like $0.20."

He also stopped spending money on material items like video games and clothes.

As a couple, they cut cable, stopped eating out, reduced their car insurance premiums by going for the higher deductible and even sold items they didn't need anymore, like furniture and computer parts.

By the time they were ready to buy, two years later, they decided to put $60,000 down on a $599,000, 3-bed, 2.5-bath townhome in Gardena, California, 12 miles south of LA. The majority of the down payment, $45,000, came from Yee's savings, while $15,000 came from Starr's. They could have put more down, but didn't want to tap into their emergency fund or long-term investments.

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Buying A $599K Townhouse In Los Angeles | Millennial Mortgage