Uncategorized April 24, 2017

How fast can you save for a down payment?

I hear so often that people are waiting to buy a home because they want to save more down payment!  It’s such a valid reason to wait….but how realistic is it.  How much are you planning on saving and will it actually save you money when buying a home?  In this current market in the Eastside and Seattle areas, with home prices increasing monthly and the looming threat of interest rates increasing, waiting to save a few thousand dollars won’t make a huge dent.

For every 1% interest rates go up, you lose buying power by 10%.  If you were qualified to buy a $550,000 home — with an interest rate increase of 1% that home now will cost $665,000.

The link below is a great article about how many years it will take to save  10% down payment.  In Washington it’s over 5 years!   If you rent, just think of how much you would have saved in rent.  Well over 10% down on a $550,000 home.