How much down payment to buy a San Diego home?
One More Time… You Do Not Need 20% Down to Buy a Home
You can buy with 0 down for Veterans, 3.5% for owner occupied (FHA type financing), doesn't have to be your first home. We can negotiate to have your down payment paid for and closing costs.(Click here) to search for affordable homes
Buy a $700,000 home for $24,500 down payment and we will negotiate to have your closing costs paid. So total, out of pocket, could be as low as $24,500. The mortgage at $675,500 is @ 4.5% is $3410/mo. Now you have property taxes and insurance too.
The payment is way higher than rent...how can you afford it?
Your mortgage interest deduction is $27,538. So if your income is $120,000 and you take this deduction, your taxable income drops from $120,000 to $92,462. If you take a property tax deduction, that is another $7700 off your income. So you would go from a taxable income of $120,000 to $84,761.* Check with your CPA/Accountant and your actual deductions.
What is the upside of real estate in wealth? Income tax savings (mortgage interest, property tax deduction), appreciation and loan buydown.
In a nutshell, the increased payment from rent to buying a home is offset by the income tax savings. And mortgage payment stays the same and Year 1 you would pay off over $13K in the balance and if it went up 3% it would be worth $21K more. So your wealth effect from loan buydown and appreciation (3%) is $24,000 in equity after your first year. (there is no guarantee of these numbers they are for demonstration purposes).
Call me to discuss your situation. George Lorimer 619-846-1244
(Click here) for low to zero down payment opportunities.
The largest obstacle renters face when planning to buy a home is saving for a down payment. This challenge is amplified by rising rents, which has eaten into the amount of money renters have leftover for savings each month after paying expenses.
In combination with higher rents, survey after survey has shown that non-homeowners (renters and those living rent-free with family or friends) believe they need to save upwards of 20% for their down payment!
According to the “Barriers to Accessing Homeownership” study commissioned in partnership between the Urban Institute, Down Payment Resource, and Freddie Mac, 39% of non-homeowners and 30% of those who already own a home believe they need more than a 20% down payment.
The percentage of those who are aware of low down payment programs (those under 5%) is surprisingly low at 12% for non-homeowners and 13% for homeowners.
In a recent Convergys Analytics report, they found that 49% of renters believe they need at least a 20% down payment.
The median down payment on loans approved in 2018 was only 5%! Those waiting until they have over 20% may already have enough saved to buy now!
There are over 45 million millennials (33%) who are mortgage ready right now, meaning their income, debt, and credit scores would all allow them to qualify for a mortgage today!
Bottom Line
If your five-year plan includes buying a home, let’s get together to determine what it will take to make that plan a reality. You may be closer to your dream than you realize!
Call/text me today to discuss your home buying options 619-846-1244.