Sep 5 2019 38376 2

Dated: 09/05/2019

Views: 20

Real Estate Math: How Much Do I Need To Save For A Down Payment On A House?

If you've been thinking of buying a house, you probably know that you should start saving up toward a down payment. However, if you've ever asked yourself how much you should be saving, you're not alone. I've broken down the math for you below. Use these equations - and calculators - provided to figure out your savings goal.

Find out how much you can afford to pay in housing costs each month

Conventional wisdom states that housing expenses should never exceed 38% of your total monthly income. Using that figure, if you make $5,000 per month, that would translate to a monthly housing payment - which should include additional costs like taxes, mortgage insurance, and HOA fees - of $1,900 per month.

To find your amount, the math would look like this:

Your monthly take home pay x 0.38 = Your ideal monthly housing payment

Learn how much house you can afford

Once you have your ideal monthly housing payment in hand, you can use that to find out how much house you can afford. To do this, you'll also need some additional information. You'll also need a projected annual interest rate and the number of monthly payments you'll make over the life of the loan.  FHA allows up to a 42% DTI or debt to income ratio.  To find out more, feel free to contact me and get Pre-Approved for a loan that suits your Income level.

Latest Blog Posts

Sep 5 2019 38376 2

Real Estate Math: How Much Do I Need To Save For A Down Payment On A House?If you've been thinking of buying a house, you probably know that you should start saving up toward a down payment.

Read More

Sep 5 2019 38376 1

LA home prices smash all-time record—againHome prices in LA County surged to $635,000 in July, shattering home prices for the second month in a row.The county’s median sale price rose 2.8

Read More

Aug 1 2019 38376 2

What the Fed’s Rate Cut Means for BuyersThe Federal Reserve cut interest rates on July 31, 2019 for the first time since the Great Recession took hold in 2008, though the move is not likely to

Read More

Aug 1 2019 38376 1

Delinquency Rates at lowest level in 18 YearsU.S. serious delinquency rate was the lowest since November 2006Total past due and serious delinquency rates were down annually in October in all

Read More