Many Americans, especially millennials, are struggling to put a down payment on a home these days, but the reasons why may surprise you.
Millennials face higher student loan debt and rent prices, but those aren't the only reasons they can't seem to save enough for a new home.
“Thirty percent of millennials say 'I need between six and ten percent down,' and that will get you a great mortgage and great fees in today's market,” says Tim Manni at NerdWallet.com. “But then an equal amount say 'I need 20 percent or more to buy a home,' and that's just inaccurate.”
A recent survey revealed a lack of basic knowledge of the home buying process.
“Knowing the loan that you're going after from the start is key to knowing how much you're going to save,” says Manni. “A lot of people do not know that state and local governments have first-time homebuyer assistance in the form of down payment and closing cost assistance and lower interest rates.”
The website offers a tool to help decide where you can save and how long it will take you.
“Like skipping a vacation, selling a car and using public transit,” says Manni. “They can pick what they would give up. They can pick their time frame and how much they have already saved for a down payment and we'll give you a sense of how long it's going to take you to save for this downpayment that you need to buy a home.”