One of the biggest hurdles that First Time Home Buyers face is saving up for the down payment. There are many misconceptions that home buyers need to have at least 20% down; which can add years to the buying process for the funds to accumulate. When a home is purchased with less than 20% down there is required PMI (Private Mortgage Insurance) that is added to the monthly mortgage payment.
Paying PMI may be in the best interest of many first time home buyers due to the rising interest rate and home price environment we are currently facing. Additionally, as a new home owner they can begin to build equity immediately instead of waiting for years to have the 20% down payment saved up.
Take a look at the graphic below for the recent Home Price Expectation Survey, which shows an example of a home owner who purchased in January that would gain nearly $50,000 in equity over the course of five years based on the home price appreciation alone.
So what does all this mean?
As a first time home buyer, you should start a conversation now about all your mortgage financing options instead of waiting. Our Inlanta Team can easily layout these options and put together a plan for what is best for your individual situation. You may end up deciding to purchase right away or take some time to better prepare.