Are you a first time home buyer wondering how much money you need to purchase a home?
I’m sure you have heard about the rising homes prices we are experiencing here in Laramie County, Wyoming and everywhere around the nation. So how can you make your housing affordable? Having cash available will help you negotiate a more favorable offer and the more cash you have to put down on your mortgage the lower your monthly payment will be. 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 need to save is different for every person. With interest rates ticking up and inflation at the highest level since the 1980s, it can feel overwhelming when it comes to saving for your first home purchase. Just remember to give yourself some grace, make a savings plan and stick with it. Remember the tortoise and the hare story, when slow and steady wins the race.
Personally, I am more comfortable knowing that I have enough cash available to cover emergencies and planning for large purchases, so I’d make sure to have an emergency fund of at least $1000 and I’d shoot for saving 20% down on my house. I am a follower of the Dave Ramsey’s financial steps. Our Broker/Owner, Steve Prescott, has been the Dave Ramsey Endorsed Local Provider for 13 years in our community. This program was recently rebranded by Dave Ramsey to RamseyTrusted. Same top-notch service every time!
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 our area. In Cheyenne the lenders we work with can help you find programs best suited to your needs and situation. Always ask, so you can compare the programs!
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 at 307-635-0303 or sign up online to search all homes for sale in Cheyenne and Laramie County, calculate a mortgage and to find an agent!