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Is it better wait and save more for a down payment?

Not sure if ai should wait a year to save more or if it makes more sense to buy now with less down. by ducasse761 from Locust Grove, Georgia. 28 days ago Reply

Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 1,904 contributions

This is an interesting question I am frequently asked. A lot of it depends on specifically where you are looking, and the price point you are looking at, and your credit plays into it as well. Let's assume you are looking in your general area. Most parts of Georgia have seen an appreciation of between 4.9 and 6.7% per year over the last decade. If we assume you are looking at a $200,000 purchase price and only have, say $10,000 in savings and your credit score is above 640, what should you do? If you really dedicated yourself to savings as much as you can, how much could you put into the bank over the next 12 month? $6,000 (That's $500 per month.) Do that for two years and you now have $22,000 to put down. BUT. That $200,000 house is now going to cost you $220,500 to $227,700 depending on the appreciation over the same two years. Sure, you now have about 10% to put down, but your starting loan balance would have been around $190,000 but at the higher price, even if you put all of your savings down, you still have a loan starting at around $200,000, making you even farther behind. Plus, you spent two years paying rent on someone else's property, instead of your own. My advice? Work on trying to buy it now. And let all that appreciation feed into your pocket. ~ I'm Licensed in Georgia. Ring me up and I can work up several scenarios for you. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ Licensed in Arizona, California, Georgia, Oregon, and Washington. Need help in other states? We got you covered. NEXA Mortgage is licensed in 46 states ~ 480-889-9000.

28 days ago
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