3 Myths About Saving For Your San Diego Down Payment in 2021
(Please note - The below has been transcribed and not the best word for word transcription).
Hey, what's going on?
It's Scott Taylor, with sandiegorealestatehunter.com.
Licensed in the state of California, for both real estate and mortgages, with an emphasis on San Diego.
Now, I had an interesting phone call just now and I got off and wanted to come here and shoot just a very quick video, because I think sometimes we forget.
There's so much information out, there so many opinions, there's somebody says do this and to do that and you read about this and you read about that.
So, I want to create a video; the three myths about saving money for your San Diego mortgage.
Here's a quick rundown of our list:
That you need to save that much money anyways.
Now, this isn't like it used to be, where you had to save up work.
There was not mortgages, and then there was mortgages and there were five year mortgages, then ten year mortgages and you had to save a certain down.
Let me break this down pretty simple, there is first time home buyer programs and down payment assistance, where you don't need money for the down.
There's V.A. program, past or current veterans, you need zero down.
There is a U.S.D.A. loan, if you bought in [inaudible 00:01:10] Alpine or someplace further.
You don’t need anything for the down. Conventional loan; the minimum down is…I'm sorry, from that, there is a one percent down, two percent lender max, with my preferred lender.
Now, from there, there’s things like three percent down conventional or three point five percent down F.H.A.
There's five percent down Piggyback up to one point five million, there's ten percent down conventional.
So, myth number one, is that you really need to save all that much money anyways for a down payment.
That it actually makes a difference.
I will be honest with you.
Go right now to any mortgage calculator and let's say that you're buying a home in San Diego, let me make up a number; for five hundred thousand dollars, okay.
And let's say that you're putting down three point five percent, because you're going F.H.A.
So, you have to put down something of fifteen… what is that, seventeen thousand five hundred give or take, whatever that works out to, okay.
You got to put that down.
Now, imagine waiting three months or six months or twelve months because you want to put down an extra three thousand or five thousand or ten thousand.
Then run those payments, you will see it literally moves it very little; twenty bucks a month, fifty bucks a month, a hundred dollars a month.
In the grand scheme of things, it doesn't change it what so ever.
So, myth number two, is that it actually makes a difference in the long run if you're putting down another percent or two percent or three percent.
So this turns into the myth number three and why I want to get on here because this is the conversation that I had.
You know, they said
“well, why don't I just save up a little bit more money, again, a few thousand dollars and buy in six months or twelve months.”
So, I just laid out an easy scenario.
The house that they were looking at getting, was five hundred thousand dollars, okay.
And we were putting down very, very, little.
I believe it was three point five percent, that's an example that I gave.
And they want to save a couple thousand more to put down and I said, look, if that five hundred thousand of our house and I'm looking forward in twelve months, let’s be somewhat… let's not say it didn’t go up that much in value.
Let's just say three percent, let's just use three percent.
I don't know, whether it be five percent, seven percent, who knows?
Let me very conservative and say three percent. Let’s say that five hundred thousand dollars in our house, goes at three percent, what’s fifteen thousand dollars?
So, if you're waiting to save three thousand or four thousand or five thousand and it’s fifteen thousand more, twenty thousand more, twenty five thousand more, you'll see that it makes no sense.
It actually makes more sense to get into day and have that property go up, use a little down to qualify and have that go up, it makes the money that you put down, grow in value.
Myth #1, is that you need to save that much anyways.
Myth #2, that it actually makes a difference and then
Myth #3, that when you see gain in the long run, potentially cost you more money.
If you like what you have here, go to my website: sandiegorealestatehunter.com. Over 500 articles on stuff like this, there is educational videos on things like this.
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Your San Diego Down Payment Insider,