What are those Pumpkin Spice Lattes costing you?
The Pumpkin Spice Latte released earlier this week and you may be tempted to spend your extra cash on a daily caffeine fix, but that small expense can add up to a big number – fast!
Saving for a down payment takes a little discipline, so limiting your extra purchases (like a latte a day from your favorite coffee shop) will help you get there faster.
The 20% Down Payment Myth
Depending on where you live, putting away just a small amount each day will get you to the down payment you may need for homeownership faster than you think. Traditionally speaking, the rule of thumb has been to put 20% down, but in many cases, it’s not necessary. In some instances, buyers may qualify for a 5%, 3.5%, or even a 0% minimum down payment. According to this NAR survey in 2018, first-time homebuyers typically pay about 7% of the sales price.
In the example below, we calculated how much a potential buyer would need to save each day for the next 5 years to make a 5% down payment on a median-priced home in several U.S. cities and how many Grande Pumpkin Spice Lattes (at $4.95/each, plus tax) that equates to.
Ask a Lender
To find out exactly how much you’d need to save, you’d need to contact a lender and discuss your specific goals and financial circumstances. We know several who would be happy to help!