How Much Money do I Need?

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This week’s question was fielded at a Lunch and Learn this week.

Q. How much money do I need to have to buy a house?

A. The answer is not as easy as you would think. In a perfect world you would have at least 20% down to avoid Mortgage Insurance, but there are programs that will allow no down payment. Here is where clients sometimes get lost, down payment and cash to close are two entirely different things. Generally speaking the program you select will have a minimum statutory investment of 3 % to 20% down, you then have to account for the reserves accounts (to pay taxes and Insurance when they are due, appraisals, inspections and other closing items. The second part is the money you would have in reserve for future payments, the more reserves you have available to less risk is associated with the loan which could mean better terms and possibly even the ability to buy more home. Therefore I always stress to my clients to get me everything. All retirement accounts, investments or any other assets you may have ahead of time so we can solidify a pre-approval letter with flexibility to shop a range of homes and work with your Real Estate agent on what may be needed in seller concessions to fit your price point, with the cash you have at your disposal.

We get a lot of questions, many from very seasoned buyers who have purchased several homes. If you have a question, please email us. We may use it in an upcoming article.

Every situation is different, Call or email Chris or Bob if you would like a personalized tips and tricks to improve your score with little effort and keep those questions coming!

Chris Conlon 704-609-5017

Bob Parm 704-778-2603

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