Help Me Buy a House!

ibelongtosomebody

Fri, Oct 14 2016, 1:32 pm

This is not a gofundme:-) Please just help me get a realistic sense of the numbers, from those of you with experience. I know there are online calculators for these things, but I'm looking to talk to real people.

I'd like to buy a house sometime within the next few years.
Right now, my savings total ~$50k.
I would like to buy a house for around ~800k.

How much more do I need for a downpayment?
What about closing costs, etc.?

In other words, how much money total do I need to buy the house?
Thank you!

pesek zman

Fri, Oct 14 2016, 1:35 pm

You need a lot more money

I wouldn't put down less than 20-%

Ideally a lot more.

Sorry

amother

Blue

Fri, Oct 14 2016, 1:44 pm

Closing costs in NYS are an average of 25K.

If you take out a jumbo loan (mortgage of more than 417k), your interest rates jump tremendously. It's best to avoid that.

If your down payment is less than 20% of your purchase price, you pay a PMI which is an additional monthly charge as insurance that you will pay. It's best to avoid that.

So if you're looking to buy in the 800k area, you should put down about 400k for the best case scenario with an additional 25k in the bank for closing. Minimum down should be 160k so that your down payment is 20% plus 25k for closing. You can also do a sellers concession which means your closing costs become part of the mortgage (if your seller agrees), and then your 800k price becomes 825k and you need to have only 165k in cash.

Either way, you ain't ready to buy a house by far. Or you need to look at cheaper houses.

doctorima

Fri, Oct 14 2016, 1:48 pm

Usually you work backward by figuring out how much of a monthly mortgage payment you can afford, then figure out how much you can borrow to have those monthly payments, and that will tell you how much of a down payment you can afford.

To illustrate, if you made $1 million a year, your $50K downpayment would be fine, whereas if you're unemployed, then even a $750K down payment would leave you struggling to make mortgage payments on a $50k mortgage. This is why a good mortgage broker can be so helpful in running the numbers.

nicole81

Fri, Oct 14 2016, 2:28 pm

I agree with doctorima's advice... what kind of monthly payment can you afford? That dictates the amount of downpayment you must come up with.

kelsorino

Fri, Oct 14 2016, 2:33 pm

Look into the FHA - its a program for first tim e house buyers that you only need to put down 3% but your monthly payments will be higher.

pesek zman

Fri, Oct 14 2016, 2:39 pm

kelsorino wrote:

Look into the FHA - its a program for first tim e house buyers that you only need to put down 3% but your monthly payments will be higher.

3% on a 800k home would result in a very high monthly payment!!!!

amother

Linen

Fri, Oct 14 2016, 2:42 pm

Why do you want a house for 800k? Why not 1.8 mil? Why not 10 mil? How did you arrive that you can afford 800k?

amother

Blue

Fri, Oct 14 2016, 2:46 pm

amother wrote:

Why do you want a house for 800k? Why not 1.8 mil? Why not 10 mil? How did you arrive that you can afford 800k?

I'm assuming she's going by the market value of an average-sized home in the area she would like to live in.

ibelongtosomebody

Sun, Oct 16 2016, 12:44 am

Hello all,

Thanks so much for your replies.
As to how I arrived at the number - 800K is the price of a home in the neighborhood I'd like to live.
My problem is that I could afford decent mortgage payments (~3.5k/month) but I don't have nearly enough savings for a down payment. I feel like I'm never going to have that much in savings!

SixOfWands

Sun, Oct 16 2016, 1:12 am

Don't forget to add in taxes (which could range from $5,000 to more than $12,000 per year, depending where you are) and insurance.

amother

Lime

Sun, Oct 16 2016, 2:05 pm

and the money necessary for repairs, home ownership is costly...

SplitPea

Sun, Oct 16 2016, 3:40 pm

Posting as my own name so you can pm me.

We just bought.

Here was our breakdown:
House amount 495,000
Amount we had in the bank 26,000
What we did: took a $15,000 sellers concession
And then took an additional $7,000 lenders credit.

After everything was said and done was had $5,000 left in the bank. We took an FHA mortgage and had 3.25% rate. We will have to pay mortgage insurance until we refinance.

I give these details under my own name because we used an amazing mortgage broker who helped us make this possible and really worked with us. I highly highly highly recommend him to anyone needing to work things out. People without a large savings CAN buy a house and he made it possible.

If you would like his number please PM me.

Edit to add: if you can only afford 3,500 mortgage you have a bit more to save up.

Last edited by SplitPea on Sun, Oct 16 2016, 4:12 pm; edited 1 time in total

SplitPea

Sun, Oct 16 2016, 4:09 pm

amother wrote:

Posts like theses always made me think we would never own. IF a person has the income to cover a mortgage and upkeep costs it's almost always better to buy rather than continue to rent. Renting is like paying mortgage to the garbage. Okay so a person has a slightly higher interest rate, or has to pay PMI if they have a job and can factor that in and afford it then why not! What's the point of saving until you have more money? The money you pay in rent over those years will not equal out to what you save....

Mortgage rates don't jump as much as people think when you don't have 20% down. They are still decent for people with less. And people have to start somewhere.