If you think you might ever want to own a home, it’s never too early to start thinking about that down payment.
RENTcafe recently reported
that Millennials spend $93,000 on rent by the time they hit 30. Sounds about right – before we bought our house (we were both 28), we spent about $75,000 on rent. Yikes!
I don’t regret spending $75,000 on rent. Renting is great! It gives you flexibility when you need it. But while you’re paying rent, make sure you’re paying yourself. Because if and when you decide owning a home is right for you, you’ll need more than the ability to pay a mortgage on time each month – you’ll need to make an investment up front via a down payment.
That investment could be as little as 3-5% if you get an FHA loan or finance conventionally with private mortgage insurance
, so you might be able to buy a home sooner than you think. But the more you save, the more options you’ll have in terms of the houses and neighborhoods you can afford. So start paying yourself first. You never know when “someday” will become “right now.”