In order to buy a house successfully unless you’re a military veteran using VA financing you absolutely need a down payment. Down payment assistance programs, no money down programs that do exist is challenging to qualify for, let alone getting into contract. Here is what to know…
That being said you need at least $20k to buy a home ideally the target mark is really about 25k to 30k. This is for a few reasons…
Let’s say for whatever reason based on the purchase price you can qualify the payment is a tad more than what you otherwise might prefer.
So rather than buying the house, you tell yourself that you’re going to save money instead, after all, it sounds like the smart thing to do right? Well not so fast. In this real estate climate, we are dealing with inflationary pressures both globally and nationally. The rising price of oil, for example, shortages in various other industries of typical products that were otherwise more readily available before the pandemic, as well pressures in the financial markets are contributing to rising house prices. Add these things into the ending pandemic, and you have a recipe for rising house prices going forward.
That being said housing prices are probably rising at a faster rate than your ability to save money. In other words by digging your heels in and saving money when you do have the down payment necessary to qualify anyway you could be shooting yourself in the foot and doing yourself an injustice financially.
Pull the trigger and buy the house even though the payment might be a bit more than you can afford if
- your income is rising
- you can pay off debt
- you can still save
Here is justification for buying a home; for you can enjoy it, you can have a tax break, and you can have a place to create happy many memories and for you and your family -buy a place for those reasons, not because you’re trying to keep up with the Joneses.
More to consider….
You could purchase the house and in 6-8 months the tangible reality is that you could likely be able to refinance get rid of the PMI for example, lower the interest rate and get the extra $100 a month of savings by having market forces work for you and with you versus against you by not taking the leap and pursuing homeownership. You should give some real consideration to this in speaking with your realtor and your loan officer who should have their finger on the pulse and can properly advise you about what your options are so you can decide what makes the most financial sense for you and your family.
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