Homes cost an average of $350,000 to $600,000, and coming up with a 20% down payment ($70,000 to $120,000) can seem impossible! So if you’re like most home buyers, you’re probably planning to put closer to 5% down. $17,500 to $30,000 seems much more (gulp) manageable. Should you do that, or wait until you save more down payment?
Of course the biggest fear about waiting is that prices will continue to rise and you’ll keep chasing them up. When you finally save $70,000, you’ll need $78,000 to buy the same property. That’s certainly been true the past several years. Will that keep happening? Not indefinitely, but I can’t say when things will level off.
If you go ahead now and buy now with 5% down, you’ll have the security of being in your own home. You’ll also have an asset. You can rent it out (in all or part), add onto it, borrow against it, use windfalls of cash to pay off more of the underlying loan, feel more secure because no one is going to kick you out, and put down roots. Even if prices eventually fall, you can take solace in knowing that they seem to always go back up, too.
My advice is to keep the long game in mind. The idea of real estate ownership is to have assets that can benefit you later in life, in addition to having a place to live now. How you buy now can depend a lot of your near future plans.
Contact me for a no-obligation consultation about your situation. My services are 100% free to home buyers. (718) 399-3320