Down Payment Options
How Long Will It Take to Save for a Down Payment?
Saving for a down payment is often the biggest hurdle for a first-time homebuyer. There are many variables including where you live, median income, median rents, and home prices.
There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense. By determining the percentage of income spent renting a 2-bedroom apartment in each state, and the amount needed for a 10% down payment, here is a map showing how many years it would take for an average resident to save enough money to buy a home. Data from the United States Census Bureau and Zillow, was used to calculate this information for each state:
What if you only needed to save 3%?
What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3% down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes reachable in 1 or 2 years as seen below:
Real Estate Bottom Line
Whether you have just started to save for a down payment, or have been saving for years, you may be closer to buying your dream home than you think! You may even qualify for a loan with NO down payment. Let’s meet up so I can help you evaluate your ability to buy today.