Sep 5 2019 38376 2

Dated: 09/05/2019

Views: 90

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

Aug 2 2020 38376 2

Housing Outlook for the Rest of 2020The average home price in Los Angeles County for the first 5 months in 2020 was $472,565 which is an increase of 13.5% percent compared to the average home

Read More

Aug 2 2020 38376 1

Ten Essential Steps to Buying A HomeYou’re ready to take the leap and buy a home.  If this is your first time, you may want to know what to do to make the process go more smoothly. 

Read More

Jul 11 2020 38376 1

HOUSING NEWS                               

Read More

Jul 1 2020 38376 2

The Jumbo Loan Market Rebounding after Pandemic Crash.The jumbo loan market crashed with Covid. But it’s slowly regaining strength One prominent nonbank lender wrote twice as many jumbo loans

Read More