If you’re a first-time home buyer, you probably still have a million and one questions about the process, starting, with, well, how the hell anyone manages to afford a home anymore.

It’s not easy. Student loans, lower wages and rising health care costs make home ownership more of a pipe dream for many than an achievable step of the American Dream. But with some planning and patience, you can save up enough to buy a house, if that’s what’s important to you.

How Much to Put Down on Your First House

Some people think 20 percent is the necessary amount to put down on a house, but the national average is closer to six to 11 percent. That gives young people a bit more wiggle room than they might expect when it comes to buying a house in certain markets.

Can You Get a House for 2 to 3% Down?

The fact is, yes you can. Well, maybe not two percent. But three to 3.5 percent down is a real possibility, depending on the market you live in, the house, your credit and a few other factors.

How Much House Can You Really Afford?

All that said, you should put more than 3.5 percent down if you can. Between student loans, car loans, credit card debt and now your housing payments, your debt-to-income ratio should not exceed 36 percent, so you’ll want to get all of that in order before you start looking.

What Are Mortgage Points and Why Are They So Important?

Mortgage points are essentially pre-payments on interest. For a couple thousand dollars at closing, you might be able to knock down your mortgage interest rate a quarter of a point or so, which will help you save money in the long run.

When to Hire a Mortgage Broker

If you’re looking in competitive markets like New York or California, you might consider hiring a mortgage broker to act as a middleman between you and lenders. Of course, it’ll cost you.

Every Expense You Can Expect With a First-Time Home Purchase

There are a ton of unexpected costs associated with buying a house, including various closing fees, increased utilities, property taxes and Homeowners Association fees. Heck, moving into your new house could cost hundreds to thousands of dollars. Make sure you’ve budgeted for it all.

Should You Put More Than 20% Down If You Can Afford It?

While it’s a nice problem to have, the fact is your “extra” money could be better spent elsewhere. Consider investing it for the longterm or using it to get other financial priorities in check.

 

 

This article was written by shared by Alicia Adamczyk to Lifehacker and Alicia Adamczyk on Two Cents from Lifehacker and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.