How Can A First Time Home Buyer Afford To Buy A Home?
Posted: under Financing, Real Estate.
Tags: Allen Davis, Credit score, Federal Housing Administration, Loan, Mortgage, Realestatesearchdirect.com, Technorati
As a first time home buyer, there are many ways the government helps you get started as a home owner. How can you afford to buy your first home?
Homer Buyer asked this same question. He had heard that 20% was the minimum down payment required on a mortgage. With home prices in his area being more than $300,000 he would have to save $60,000 for a 20% down payment.
Homer had promised himself he would buy a home once he finished college. Homer had just finished his Masters degree in Computer Science. He had a great new job starting at $85,000 per year. Even if he saved every penny it would take over six months to save that much, after taxes.
And he had other expenses too. He was renting a nice apartment suitable to his new station in life. He needed to pay utilities and food. A car payment, insurance and gas. When he added it all up, he had less than $1500 per month to save for a down payment. It would take him 40 months to save up for the down payment.
Homer didn’t want to live the next three years in an apartment saving for a down payment, all the while helping the landlord pay his mortgage. Homer wanted to start paying down his own mortgage, instead. He looked forward to the day he owned his own home free and clear, and wanted that day to come as soon as possible. What was Homer to do?
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Jan 23 2009
