Student debt, car payments make buying a house tough
So here’s the good news: It could soon be a whole lot easier to make a down payment on a house.
If you’re in the market right now, you’ve probably heard that Fannie Mae wants to start accepting down payments as low as just 3% for conventional loans.
For many households, that’ll make saving enough for a down payment possible in just a couple years, rather than the 12 years it can often take now.
Of course, lower down payments often come with higher monthly mortgage payments.
So real estate information company RealtyTrac ran an analysis of 500 housing markets around the country to see what’s affordable for buyers who take that 3% down payment option, but also have the average amount of student loans ($29,400 for 2012 grads) and car payments ($471 per month.)
That’s where the bad news comes into play.
“Even though they may get past the one obstacle of that big down payment, that additional debt is going to weigh on them and make half of the markets nationwide unaffordable to them,” says Darren Blomquist, RealtyTrac’s vice president.
“They're making that 3% down payment, so they've overcome one obstacle. But if they have that additional debt, only 48% of the markets that we looked at are affordable.”
That sounds really depressing. But don’t despair just yet.
Blomquist says they also found that many people could be taking advantage of statewide down payment assistance programs – but aren’t.
Find out more about what’s available to you here.