20% Down Payment takes 12 years of savings!!! Thinking about buying your first home? Prepare to save! It can take on average 12.5 years for a first time home buyer to save 20% down payment based on current personal savings rate. The figure is based on current median home prices and doesnt take into account further home price rises. In a recent survey found that out of 512 counties the median price for a home is around 260,000, which would require the buyer to save close to 52K for a 20% down payment. When entering the workforce it will take several years to start making the national median salary, usually not reached until 30 years of age. If that is the case then first time home buyers with a 20% down payment would be purchasing their first home at age 42. Melvin Watt, director of the Federal Housing Finance Agency, has suggested lowering the down payment for a conventional loan to 3% from the traditional 20%. In that case, it would take first-time buyers less than two years to save enough. The FHA allows buyers to get a mortgage as low as 3.5% with a 30 year fixed rate. Buyers that can meet the debt-to-income ratio could qualify for better terms on their loan if they could bring a higher down payment. What do you think of this? Do you think the Federal Housing Administration should lower the down payment for First Time Home Buyers?
Posted on: Mon, 10 Nov 2014 22:00:00 +0000
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