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Time and again, we hear from potential buyers that one of the most challenging parts of buying a home is saving up for the down payment.
Many people believe that they need a 20% down payment in order to buy a home, but thatās not really true. While 20% is a standard, it is by no means the only option for putting down a deposit on a home.
In fact, there are a wide variety of mortgage loans out there that may only require as little as a 3% down payment. If youāre still saving up for your homeās down payment, here are a few things to keep in mind about your buying timeline.
How Long Does it Take to Save up a 20% Down Payment?
This depends largely on your financial circumstances. How much you make in a year, your current debt and monthly expenses, and your saving patterns will largely dictate how much (and how quickly) youāll be able to save.
Many financial advisors suggest saving around 20% of your monthly income throughout the year, and this is certainly a great place to start! However, if you want to buy a home as soon as possible, you may have to be a more aggressive saver.
It also depends on what state you live in. In fact, the number of years it takes a median-income earner to save up for a 20% down payment differs largely by state.
How Long Does it Take Buyers in North Carolina?
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In North Carolina, it generally takes someone around two years to save up enough money for a down payment. In other states, depending on median housing prices, this may be as high as 30 years, or as low as a little over one.
But thatās just for the 20% down payment option. If youāre eligible for a 3% down payment program, it may only take you about half a year to save up for a down payment.
All in all, it depends largely on your financial situation!
How Much Should I Spend on Housing in a Month?
The age-old rule for handling your income is the 50/30/20 rule. Half of your monthly income should go to necessities like housing, healthcare, and food. 30% should go towards discretionary spending, and 20% should go to savings.
Experts in real estate agree that of that 50%, no more than 30% of your income should go towards your housing expenses.
How Do I Navigate the Financial Side of Buying a Home?
We can help with that. Here at Linda Craft & Team REALTORSĀ®, we have years of experience helping home buyers from a wide variety of backgrounds find success in the greater Raleigh real estate market. Not only can we walk you through your many options as a buyer, but we can also connect you with professional lenders in the area.
Have a question about buying a home in Raleigh? Please donāt hesitate to give us a call or browse our free resources today.