Selling your Portland home? Check out our free home value report
Buying a Portland home? Search all homes for sale
Buying a Portland home? Search all homes for sale
If you can't afford a large down payment, should you wait to buy? We get this question all the time, so we thought we might address it here today, and explain how private mortgage insurance might help you buy sooner than you thought you could.
It seems we run into people every day who think they need to wait to move in order to save a large down payment. They think that without a 20% down payment, they won't be able to qualify for a mortgage in today's market.That is a mistaken belief, as there are many available programs out there that require anywhere from 3.5-10%! There are even some programs that require no money down, but those are a bit harder to qualify for.
Putting 5% down is a whole lot more affordable for many people than putting 20% down, at least in the short term. For instance, if you put 5% down ($10,000) on a $200,000 home, as opposed to 20% ($40,000), your monthly payment would only be $232.75 more expensive. Many people think that saving for a 20% down payment will save them money, but is that really true?
Core Logic recently published a report that tells us to expect a residential appreciation rate of about 4.3% and I think here in Portland that number is going to be even higher (it's currently in the 7% range!). If you were to purchase private mortgage insurance, the difference in payments over the next 12 months would be $2,793, whereas the expected appreciation over the next 12 months is $8,600. When you take those numbers together, it shows that you are missing out on $5,807 a month by not owning.
If you would like to sit down and talk about your options, please don't hesitate to reach out to us. We would love to help in any way we can!
