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First, home prices have exploded in value since the pandemic, in some cases more than doubling.
Combined, these two factors have pushed homes to near-record levels of unaffordability.
But this doesnt mean that you should give up on your dream of buying a house.
Setting a Savings Goal
Its hard to reach a savings goal until you know what it is.
Understanding how a varying down payment affects your total mortgage cost is an important part of the process.
Over the course of your 30-year loan, youd pay $408,142.36 in interest.
However, your monthly mortgage payment would jump to $2,452.42.
The first step increating a budgetis to identify your monthly income and expenses.
Include a line item for every single inflow or outflow.
If youve already got a substantial amount set aside every month for saving, thats great!
Simply reallocate some of your savings budget to your down payment savings.
However, thats exactly why budgeting is helpful.
Plus, it can make it difficult to know exactly how much you have saved for that specific goal.
If youre trying to maximize your savings, look for accounts that pay the highest yields.
This is particularly true for first-time homebuyers with lower incomes.
Youll also have to meet various income requirements.
However, there are some cons to be aware of also.
Not all lenders accept these types of programs, and it can be hard to qualify for them.
Here are a few ideas:
FAQ
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