Homebuying requires preparation to manage financial expectations and avoid surprises. AI tools assist in budgeting, though their accuracy varies based on individual circumstances. The down payment is crucial, typically ranging from 3% to 20%, translating to $9,000 to $60,000 for a $300,000 home. While a 20% down payment is common, a 3% option is viable through certain loan programs aimed at first-time buyers. Expert financial planners acknowledge the value of AI in initial budgeting but stress the importance of personal financial nuance.
"That objectivity makes AI a great starting point, especially for first-time homebuyers trying to map out budgets and savings goals," Andrew Latham, certified financial planner with SuperMoney.com, tells Realtor.com. "But AI starts to lose its edge the more specific your needs get, especially when it comes to something as localized and financially nuanced as buying your first home."
ChatGPT explained that "buying your first home depends on a bunch of factors like where you want to live, the type of home, your financial situation, and local market conditions."
AI suggests a down payment "typically 3% to 20% of the home price." Based on a $300,000 home, a 3% down payment is $9,000; a 20% down payment is $60,000.
"A 3% down payment can absolutely be realistic-especially for first-time homebuyers using conventional loan programs like Fannie Mae's HomeReady or Freddie Mac's HomePossible," explains Brennan Thiergartner, certified financial planner at Fidato Wealth.
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