Costs of buying a house

amother

Tue, Jan 13 2015, 1:29 pm

Dh and I do not plan to buy a house fir at least another year or so but I am starting to become interested in the finance aspect of it as I do not know what we can/cannot afford. Can someone please tell me the costs involved in buying a $500,000 home? Is there a major difference in costs involved in a home in New York vs New Jersey? We are more likely to buy in New York since our family is there but I know you get more for your money space wise in New Jersey. Any help is very much appreciated.

nyer1

Tue, Jan 13 2015, 1:37 pm

there are already a TON of threads on this, so you might want to try doing a search.

the best thing to do is first see how much you can afford per - month for a mortgage and taxes and utilities. then also factor in how much you have to put down for a down-payment.

here's a rough example. on our condo, we put down:
170k for a purchase of 289k. (much more than the usual required 20% down for a home purchase)
that left us with a mortgage of around $450 a month plus around 1k for taxes / condo maintenance (all utilities are included in that price).
so, figure, that bought us to about 1500 or 1600 a month, which includes electric, maintenance, mortgage and taxes.
we are saving another $400/month towards our NEXT down payment of a house purchase. (figured we would otherwise be paying 2k a month toward rent for an apt of the same size).

we also have more than 6 months worth of savings for repairs and other things that come up. in order to pre-qualify for a mortgage, you definitely need to have that kind of cash. (I.e. - whatever the monthly costs would be, you would most likely need to show you have 6x that in the bank)

closing costs are usually based on a percentage of the overall cost. if I remember correctly, our closing costs were around 5k, which we put into the mortgage rather than paying upfront.

start by getting a mortgage pre-qualification - it would give you a sense of what you can afford. take into account yeshiva tuition, property tax, utilities etc. also keep in mind what you ACTUALLY take home each month AFTER taxes and work backward from there. also think about how u can pay your bills while still saving. with a house, it's VERY likely that repairs will be needed. there are also 'mortgage calculators' online where you can just plug in an example for the down payment and a sample house cost to see what the monthly bill would be. but this is really a rough estimate. for example, you might want to try putting in, house is 500k, and we can put down 100k, and see what it says. play around with the numbers.

ruchelbuckle

Tue, Jan 13 2015, 1:56 pm

nyer1 wrote:

we also have more than 6 months worth of savings for repairs and other things that come up. in order to pre-qualify for a mortgage, you definitely need to have that kind of cash. (I.e. - whatever the monthly costs would be, you would most likely need to show you have 6x that in the bank)
.

FYI: this might vary from lender to lender, etc..
I have bought a few properties and I never had 6x the amount in the bank.
They mortgage lender always wanted to see that I had the cash for the down payment in the bank, but never needed more than that.

nyer1

Tue, Jan 13 2015, 2:50 pm

ruchelbuckle wrote:

it's possible then that it was required for my condo association, not for the mortgage. but regardless, most financial advisors will tell you it is unwise to purchase a home until you have 6 months worth of living expenses saved up, in case unemployment becomes a problem or there is damage to the home that must be paid and isn't covered by homeowner's insurance etc.

oh yeah, forgot to add homeowner's insurance to the calculations above.