Assessing the likelihood of making a 20 percent down payment
Individuals in Florida who are interested in buying a home may have to spend over six years to save up for a 20 percent down payment. This is a result of both higher rents and higher home prices throughout the country. According to an analysis by HotPads, it could take some people up to 30 years to save enough money to make a 20 percent down payment on a home.
The median home price in the United States is $216,000, which would require a person to save $43,200 to reach 20 percent of the purchase price. Complicating matters is the fact that many younger first-time borrowers have student loan and other debt. To qualify for a mortgage, a lender generally requires that an applicant’s total debt be at or less than 43 percent of his or her income. Lenders will consider most debts such as credit card, student loan or auto loan obligations.
Those who don’t want to put 20 percent down may want to look into government-backed loans. FHA loans only require a 3.5 percent down payment, but they also require that a borrower pays for private mortgage insurance. Applicants who have served in the military could be entitled to loans that don’t have any down payment requirement attached to them.
For those looking to buy residential property, local market conditions may play a role in determining when a purchase is made. It may also determine whether a person buys a fixer-upper or move-in ready house. Regardless of what a person chooses to buy, an attorney may help a buyer review a purchase contract or review disclosure forms. This may help that person better understand the condition of the home as well as his or her rights and responsibilities after signing the contract.