Saving for a Down Payment?
Published on 04/30/18 by Muriel Palmgren
The down payment for a home is a stumbling block for many people who want to buy a home. Have you ever wondered how long it would take to save enough for a down payment?
Here is an article that has calculated just that. They are using the average home price in different cities and assuming you want to put down 20% of the purchase price as a down payment. While 20% is the amount that you might want to put down, most borrowers can put down a little as 3% to 5%. (Some loans, such as VA or Rural Development Loans, require no down payment.) Thus, the number of years needed for a 5% down payment could be 1/4 of the time needed for 20% down. That means that you would need to save for about a year and a half for a 3% down payment.
New Orleans ranked number 14 out of 50 cities. It takes twice as long to save a 20% down payment as the lowest ranked cities because our average home price is higher than many areas.