Are you a first time home buyer wondering how much money you need to purchase a home?
Having cash available will help you negotiate a more favorable offer. When you don’t have cash for a down payment and closing costs, then you are relying on the lender and seller to drive the negotiation. You will also pay more over the long run. The right answer on how much money you are determined to save is different for every person. Personally, I am more comfortable knowing that I have enough cash available to cover emergencies and planning for large purchases. I am a believer in Dave Ramsey’s financial steps.
Down Payment –
Depending on your loan type and credit, the average down payment ranges from 3.5-20%. Do some research to see what’s available for first time home buyers in your area. In Cheyenne the lenders we work with will help you find programs best suited to your needs and situation.
Closing Costs –
Your closing costs include several items and typically range between 2-5% of the loan amount. These costs can include lender origination costs, escrows for your reserves, prepaid expenses like homeowners insurance, taxes and other fees.
Moving Expenses –
You are now a home owner! You saved enough cash to get you through the down payment and closing costs, congratulations! Now don’t forget the expenses that are associated with moving; clean the last place you lived, hire a moving company, deposits on utilities and phones. All these thing can add up fast.
New Home Expenses –
After all that, now what’s in store for you in your new home? Do you want to paint, carpet, update anything in your new place? How about furniture, dishes, bedding, towels, pictures, TVs, food to fill your pantry, landscaping, the list can go on and on.
It’s all fun to think about. Make a plan and stick to it. You’ll be glad you did!
If you’d like help buying your home, we’ll be happy to help you! Contact one of our buyer specialists today!