How long does it take to save for a house? How much money should you save before buying a house? Read on to find out here.
We get it. You’re tired of coming home to a house that you can’t truly call your own. You hate the fact that every month, you see your hard-earned cash go towards a rent payment that isn’t contributing towards your equity in your living space. You can’t wait until you have a space that you can customize to your heart’s content.
Owning a home is a special privilege, and it’s a solid motivator to work hard and save money.
But it can sometimes feel unachievable, giving rise to the question, “How long does it take to save for a house?”
In this article, we’ll answer that complicated question by looking at the various factors that influence how much time it will take you to save for the house of your dreams.
How Long Does it Take to Save for a House? Answer: It Depends
Were you looking for a straightforward, clear-cut answer to how long it takes to save for a house? Unfortunately, one doesn’t exist. The answer to this question depends on several factors that only you can know.
The first factor to consider is the price of the type of house that you want to buy. If you want a house close to the city, with a couple of spare rooms, that passes its building inspection report with flying colors, and has plenty of yard space, then you’re going to be looking at shelling out a lot of money for that house. Consequentially, it’ll take quite a while to save up for that house.
But if you’re okay with a longer commute to work and can commit to a fixer-upper, then you might be ready to purchase your home in just a few months!
So to figure out how long it takes to save for a house, the first step that you need to do is figure out what your budget for a home is. For the sake of this article, let’s say that your budget for your home is $300,000.
The next step is to figure out how much your down payment will be. Depending on your economic status and credit history, you may be eligible for as little as 5% down. In that case, your down payment for your home would only be $15,000. Depending on your income level, that shouldn’t take too much longer than a year or two to save up.
However, if you want to avoid having to pay mortgage insurance or if you don’t have that healthy of a credit score, then you may end up paying 20% down, or $60,000. All of a sudden, you’re taking four years longer to save up for that home.
Assess Your Financial Situation
There’s no way for us to give you a straightforward answer to the question, “How long does it take to save for a house?” But with these guidelines, you should be able to calculate how long it will take to save for your down payment in a few easy steps.
For more home buying advice, be sure to check out the rest of the articles on the website!