If you thought saving for a home these days was easy, then you may want to think again before you fill yourself up with false hope. In this article we are going to look at How Long To Save For Home Purchase with regards to young first time homebuyers that are in their 20’s. In an economy where we still haven’t fully recovered from the Great Recession, adults that are coming out of college are faced with large amounts of student loans and job prospects that probably aren’t up to what they imagined. I do feel for this group of borrowers entering the market at a bad time, especially after the borrowing rules dealing with student loans and that fully amortized payments or 1% of the amount outstanding is used to calculate their loan.
When debating How Long To Save For Home Purchase you need to determine where you’d like to buy a home and what your purchase price will be. It is essential that you have a savings goal in mind and a plan in order to get there. For example, if you want to move to New York, or California, you know that home values are expensive for the most part. If you are at an entry level job out of college, you may never have the savings potential to even get an adequate down payment within 5 years. Let’s say for example you are making a modest $65,000 annually but want to live in an area where median home prices are $600,000. With an FHA loan you will need at least 3.5% down and on a $600,000 home, that is $21,000. On top of this, if you are already living near or in this area, the cost of living in normally high as well and because of this everything costs more, especially rent. If you are bring home$4,000 per month and your rent is half of that or more, how can you possibly save up the minimum amount needed for down payment? Knowing this, you can conclude How Long To Save For Home Purchase would take quite a long time.
If you fall into the above situation when trying to figure out How Long To Save For Home Purchase, then maybe you need to re-evaluate your possible locations to make a living and start a family. Depending on your career and skillset, you could be able to find a comparable job in a less expensive part of the country and be able to afford housing a lot sooner than later. In our previous example of How Long To Save For Home Purchase, if you lived in the Midwest where the median house price is $250,000, for that same 3.5% down payment FHA Loan, you are only looking at needing to save $8,750. This is nearly $13,000 cheaper than the alternative. When you are looking to make a move, just make sure it is to an area you will be able to afford and can afford for years to come. There is no sense living in a house where you can’t afford day to day activities. If you need assistance in purchasing that next home, then you need to give me a call at 888-900-1020 or inquire through my website at www.loanconsultants.org. I look forward to hearing from you!