How To Save A 20% Down Payment

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How To Save A 20% Down Payment by myCAREexpert
How To Save A 20% Down Payment by myCAREexpert

 

If you're looking to buy a home, it's never too soon to start saving.

 

Living in sunny California is going to cost you.  The west coast is home to some of the most expensive real estate in the nation.  Many are tempted to take advantage of loan programs with low down payment options to reduce the initial out-of-pocket investment.  Saving for a down payment of $50,000, let alone $100,000 or more seems insurmountable to many would-be homeowners.  But keep in mind, anything less than a 20% down payment will require private mortgage insurance (PMI), an added fee that is tacked on to your monthly mortgage payment, and it may end up costing you more in the long run.

The best way to try and save up for a down payment on a home is to make a plan and stick to it.  Estimate how much cash you will need to purchase a home in your target price range – ideally 20% of the purchase price and another 3% for closing costs.  Then determine how much money you can devote to that goal on a monthly, weekly, or daily basis.  Setup an automatic transfer into a savings account specifically for your down payment, and don’t use that money for anything else.

Even after you have saved for the down payment, make sure you can afford the home.  There is much more to consider than just the sticker price, and many people forget to factor in property taxes, insurance, utilities, maintenance, and repairs. 

The Real Deal

Take a look at what it would cost to save for a 20% down payment in 4 of California’s most popular markets.

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Sacramento

Median Home Price: $275,800

20% down payment: $55,160

How much you'd need to save for a down payment:

5 years: $30.20 / day

10 years: $15.10 / day

15 years: $10.10 / day

Los Angeles

Los Angeles

Median Home Price: $434,700

20% down payment: $86,940

How much you'd need to save for a down payment:

5 years: $47.60 / day

10 years: $23.80 / day

15 years: $15.90 / day

San Diego

San Diego

Median Home Price: $510,300

20% down payment: $102,060

How much you'd need to save for a down payment:

5 years: $56.00 / day

10 years: $28.00 / day

15 years: $18.60 / day

San Francisco

San Francisco

Median Home Price: $748,300

20% down payment: $149,660

How much you'd need to save for a down payment:

5 years: $82.00 / day

10 years: $41.00 / day

15 years: $27.30 / day

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  1. ashley03231994@gmail.com August 21, 2016
  2. donsaun99@gmail.com September 6, 2016
  3. ashley03231994@gmail.com September 6, 2016
    • donsaun99@gmail.com September 18, 2016

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