One of the biggest hurdles homebuyers face is saving for a down payment. As you’re budgeting and planning for your home purchase, you’ll want to understand how much you need to put down and how long it will take you to get there. The process may actually move faster than you think.
We can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median-priced home. Since saving for a down payment can be a great time to practice budgeting for housing costs, this estimate also uses the concept that a household should not spend more than 28% of their total income on monthly housing expenses.
The national average for the time it would take to save for a 10% down payment is right around two and a half years (2.53). Residents in Iowa can save for a down payment the fastest, doing so in just over one year (1.31). In Maryland, the average estimate is 3.13 years.
What if you only need to save 3%?
What if you’re able to take advantage of one of the 3% down payment programs available? It’s a common misconception that you always need a 20% down payment to buy a home. There are affordable options and down payment assistance programs available, especially for first-time buyers. Saving for a 3% down payment may not take several years. In Maryland, the average estimate is less than a year.
Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Let’s set up a time to talk so you can learn more about the down payment options available and how they support your plans. Contact me today.