How much money do I need to buy my first house?

[Insomniator]

Renting now, but the GF and I are really looking to buy by the time the current lease is up in 11 months (just renewed). Lets say its possible to find the right house for 200-300k (probably super crappy in my area but better then a 1BR apartment).

We have a good friend who is a realtor in the area and she says we only need 5% down (thought it was like 20%?) So lets say 15k. So between inspections, realtors, fees, blah blah blah... what do I need in addition to 15k to actually buy the house?

Lets forget furtinure/landscaping/upkeep for now.

 

[DesiPower]

20% for convention loan, can do 10% with PMI and conventional. Anything below 10% will not be conventional fixed rate iirc

Only other think you need to pay for is Closing cost, which includes title fees, title insurance and few other surveys and inspections, typically amounts to around 5k. Realtor will not charge you anything they get their commission from the seller. Closing cost is always negotiable, for example if you are buying a brand new house in a community that is almost sold you they might give "incentives" which will cover closing cost. Many loan agencies or agents sometimes will cover the closing cost minus the title insurance if the loan amount if substantial, typically over 200k

 

[TwiceOver]

As much as you can possibly throw at it.

 

[DAGTA]

20% will get you the best loan choices.

 

[DesiPower]

20% will get you the best loan choices.

Not true in my experience, 10% + PMI will give you the exact same deals.

 

[Markbnj]

We put $100k down, which was more than 20% at that time. You can do it for a lot less than that if you shop around. At that time real estate was appreciating faster than capital invested in other vehicles, so I couldn't make more on that $100k than the cost of borrowing it. I'm not sure whether that is still true or not.

 

[Jimzz]

I would try and hit for 20%+. That and don't forget to add in the closing cost, move in cost, and the things you will need to buy once you move in. Let alone you now will have a property tax bill and all the utilities.

 

[DesiPower]

As much as you can possibly throw at it.

If you have 100s of thousands laying around then sure, if you are staring fresh like OP then no, you need cash in hand for emergencies, emptying you bank on down payment is not a good idea.

 

[HumblePie]

20% will get you the best loan choices.

Naw, VA loan with disability = no money down, no PMI, and no fees

 

[DesiPower]

I would try and hit for 20%+. That and don't forget to add in the closing cost, move in cost, and the things you will need to buy once you move in. Let alone you now will have a property tax bill and all the utilities.

True, I did not spend much on moving, it was around $400, we did not have much to spend so we did not but any new furniture or decorative stuff for the 1st 18 months but still we had to spend a lot on things like Fridge, water softener, blinds, garage door opener and so on... It was a brand new house and I remember I had to spend around $3500 that I did not have.

taxes and insurance will be added to the monthly payment if you get Escrow, which almost everyone does in order to get the best rates, so that wont be a shocker, that will be know before you buy. Utilities do go up by atleast $100, maybe even $150. HOA fees, but that not much. Then you would like to get home security and exterminist and trash collection, that close to $40 a month each.

 

[purbeast0]

if you can get a navy fed account, you need $0 to buy a house with conventional loan and no PMI.

 

[Insomniator]

50k would take years and years to save. Doesn't seem feasible. I have ~15k right now, GF has zero. Even if we ate beans every night, I don't think my bank account is even capable of going over 20k... the gods would not allow it.

 

[dn7309]

if you can get a navy fed account, you need $0 to buy a house with conventional loan and no PMI.

The only way to get a house with no PMI is put 20% down or get a VA loan. To get a VA loan you need to serve In the armed forces.

50k would take years and years to save. Doesn't seem feasible. I have ~15k right now, GF has zero. Even if we ate beans every night, I don't think my bank account is even capable of going over 20k... the gods would not allow it.

Seriously, I live pretty frugal but so far I only saved about 15k after a year of working full time out of college. It's always the stupid things that came out of no where that will eat up your money.

 

[Jimzz]

50k would take years and years to save. Doesn't seem feasible. I have ~15k right now, GF has zero. Even if we ate beans every night, I don't think my bank account is even capable of going over 20k... the gods would not allow it.

Then how do you plan on paying for the house, and all the bills that come with it, if you can't save anything right now?

 

[DesiPower]

50k would take years and years to save. Doesn't seem feasible. I have ~15k right now, GF has zero. Even if we ate beans every night, I don't think my bank account is even capable of going over 20k... the gods would not allow it.

Then you can look at a $150k house, 10% down and PMI will work, total monthly payment, everything included should not be more than $1500/month

 

[Insomniator]

Then how do you plan on paying for the house, and all the bills that come with it, if you can't save anything right now?

Not a terrible question. I don't know why we have no money. We make enough, but somehow my CC bill is ridiculous every month.

I just want to turn our 1750/mo rent into 1750/mo mortgage.

 

[Brainonska511]

Not a terrible question. I don't know why we have no money. We make enough, but somehow my CC bill is ridiculous every month.

I just want to turn our 1750/mo rent into 1750/mo mortgage.

Then you need to look at your spending. Statements are itemized - figure out where the waste is. Stop eating out so much, cut back on extraneous purchases, etc.

And turning $1750/mo on rent into a $1750/mo mortgage sounds like a terrible idea. You need to also account for other costs associated with owning a home that you may not have with renting, including: higher utility costs, property and school taxes, home repair and maintenance, etc. To not figure those costs into what you can afford is short sighted and setting yourself up for financial hardship.

 

[TwiceOver]

If you have 100s of thousands laying around then sure, if you are staring fresh like OP then no, you need cash in hand for emergencies, emptying you bank on down payment is not a good idea.

Of course. You don't burn your emergency fund on your house down payment, they are two separate categories.

 

[edro]

5% down around here, but you have PMI until you reach 20%.
We recently pre-approved for 5% down (they did it, not us) and said we could raise it to whatever percentage we want before closing.
That could also be because we have great credit.

 

[purbeast0]

The only way to get a house with no PMI is put 20% down or get a VA loan.

false.

as i mentioned, if he can get a navy fed account, he can do it with 0% down and no pmi.

i know this because i am on one of those loans (although we did put 5% down).

https://www.navyfederal.org/products-services/loans/mortgage/mortgage.php

 

[moonbogg]

Pay off all CCs and stop using them and then reevaluate.

 

[ctbaars]

^^ Yes. and aim for 20%

 

[dn7309]

false.

as i mentioned, if he can get a navy fed account, he can do it with 0% down and no pmi.

i know this because i am on one of those loans (although we did put 5% down).

https://www.navyfederal.org/products-services/loans/mortgage/mortgage.php

How does that type of loan work? The VA loan manages to get you no PMI because they guarantee the loan backed by the VA and you have to pay a funding fee.

Is this loan straight up 100% financing with no pmi and no hidden cost elsewhere or high upfront fees?

 

[purbeast0]

How does that type of loan work? The VA loan manages to get you no PMI because they guarantee the loan backed by the VA and you have to pay a funding fee.

Is this loan straight up 100% financing with no pmi and no hidden cost elsewhere or high upfront fees?

well navy fed is just an awesome credit union. they are the only place that i know that has something like that, which is why we used them. luckily my wife got an account with them when she was 17 (before i knew her) because her friend worked there and could get her an account. neither of us have ever been in the military.

no hidden costs or anything. they just own!

 

[dn7309]

well navy fed is just an awesome credit union. they are the only place that i know that has something like that, which is why we used them. luckily my wife got an account with them when she was 17 (before i knew her) because her friend worked there and could get her an account. neither of us have ever been in the military.

no hidden costs or anything. they just own!

Shit good thing I still got my navy fed account open then