How Much Do I Need To Save To Buy A Home? 

 How Much Do I Need To Save To Buy A Home? 

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Stonebridge Mortgage Group Answers Group Answers Home Buying Questions In Gresham 

First-time homebuyers in Gresham may find themselves a bit lost when it comes to buying a home. After all, there are many costs, many fees, and many steps one must take to buy a home. When you’re looking to buy a home in Gresham, you can rely on Stonebridge Mortgage Group. Make use of our mortgage-related services, including but not limited to loan officer services and mortgage broker services, to get a better understanding of the home buying process. Stonebridge Mortgage Group helps Gresham first-time homebuyers. 

How Much Do I Really Need To Save To Buy A Home? 

If you’re here, then you likely already know that homes require a down payment. However, a down payment isn’t the only thing you need to save for when you’re considering buying a home in Gresham. There are other fees, such as closing fees, that you need to keep in mind. Here, we’ll go over those other costs with you so you can have a more realistic idea of what you need to save for when purchasing your Gresham home. 

The Down Payment 

How much you save ultimately depends on the cost of the home. If you want to avoid paying a PMI, or private mortgage insurance, you’ll want to pay 20% down. However, this is often difficult, especially for first-time homebuyers. Some mortgage lenders will have options to make smaller down payments, such as 10% or 5% down. Assuming you pay 10% down and that the home’s value is $200,000, that would mean saving $20,000 to start with. 

Closing Costs 

Although closing costs vary from state to state and even lender to lender, you can expect closing costs to be about 2-3% of your loan amount. That’s an extra $4,000 to $6,000 dollars. You can try, in some areas, to negotiate with the seller to cover your closing costs, or to negotiate with the lender to give you “premium pricing,” or a higher interest rate in return for their covering the closing costs. 

Stonebridge Mortgage Group offers the best mortgagerelated services! 

Prepaid Expenses 

Many lenders require homebuyers to have real estate taxes and homeowner’s insurance in escrow. Your monthly payment will include these charges, which the lender will pay when it’s due. The lender will collect a certain amount upfront to be able to pay these costs when they’re due. Lenders can put between 2 to 12 months’ of these real estate taxes in escrow. So, for example, if you’re paying $250 a month in taxes on your home and you need a 6month escrow, you’ll need an additional $1,500 to cover prepaid expenses. 

Utility Adjustments 

Fortunately, the costs for utility adjustments aren’t often more than a few hundred dollars. These costs come from utility costs which were paid by the seller in advance. For example, you may need to pay the seller back for recently prepaid utilities such as water, trash removal, or sewer. If there’s a Home Owner’s Association in your neighborhood and you’re buying partway into the year, you may need to pay the seller back those months of HOA fees. 

Cash Reserves 

Lenders will also require that you have some cash left in savings after the down payment and closing costs are paid. This is to ensure you’ll be able to make your monthly home payments for the first few months. For example, if you’re required to have a cash reserve of 2 months, and your total monthly payment for your principal, taxes, interest, and insurance is $1,500, you’ll need to have $3,000. 

In summary, for a $200,000 home, a 10% down payment is $20,000, leaving you with a loan of $180,000. A 2.5% closing cost would be an additional $4,500. Then, another 2% for prepaid expenses is $3,600. Utility adjustments could cost around $500. Finally, a twomonth cash reserve is $2,400. This would leave you needing to save a total of $31,000. 

If you have questions and would like help calculating how much you’ll really need to save for a home, contact Stonebridge Mortgage Group. 

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters 

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home! Call Stonebridge Mortgage Group today at 503-661-5580. 

How Much Money You Really Need To Buy A Home, Part One

How Much Money You Really Need To Buy A Home, Part One

Stone Bridge Mortgage Group_How Much Money You Really Need To Buy A Home, Part One

First time Gresham homebuyers may be surprised by the amount of money you need to save to close a deal on a home. In addition to the mortgage down payment, Gresham homebuyers need to be prepared to save up for additional costs and fees to be able to complete the transaction of buying a home. So how much money do you actually need to have saved up to buy a home?

The Down Payment

This is the part most potential homebuyers know they’ll need to save for. The down payment is usually expressed as a percentage of the purchase price of the property. For example, if the purchase price is $200,000, and you’re required to make a 10% down payment, you’ll have to pay $20,000. However, how much percentage you actually put down is something Gresham homebuyers will want to consider carefully.

Gresham homebuyers who want to avoid paying additional private mortgage insurance (PMI), need to save for a 20% down payment. However, coming up with 20% may be difficult for many first-time buyers. With this in mind, some mortgage lenders have options with down payments of 10%, 5% or—if you qualify for special FHA loans or VA mortgage loans—as little as 3.5%

Closing Costs

Generally speaking, closing costs may run up to two to three percent of your loan amount. So, on a $200,000 mortgage, you’ll need to come up with between $4,000 and $6,000 in addition to your down payment. Keep in mind that, due to differences in either the real estate transfer tax, or mortgage “stamps” (or, government taxes collected based on a percentage of your mortgage loan amount), closing costs tend to vary from state to state.

Gresham homebuyers will also find that closing costs can vary depending on the lender, or even from one loan to another. Each lender tends to charge different application fees, and lenders often charge “points” — which are representative of a percentage point of the mortgage loan amount.

Alternatives For Reducing Or Eliminating Closing Costs

Gresham homebuyers can potentially lower their closing costs by a significant amount by trying one of the following:

  1. Negotiate for the seller to pay your closing costs. This will only be permissible in areas where this is common practice.
  2. Negotiate premium pricing with your lender. This is where you pay a higher interest rate on your mortgage in exchange for the lender paying the closing costs.

Either may be a good option, particularly if you are making a minimum down payment, like five percent and adding closing costs on top would make your cash outlay significantly higher.

Prepaid Expenses

This tends to be one of the confusing points for first time homebuyers. Prepaid expenses, however, are a necessary cost. With most mortgages, the lender will put real estate taxes and homeowner’s insurance in escrow. This means that those charges will be included in your monthly payment, and paid by the lender when due. For this to work, your lender will need to collect certain amounts upfront to ensure that funds are available to make the payments when they are due. The escrow accounts are set up to pay the charges on the next due date, while a portion of your monthly payment replenishes the escrow account for the due date after that. How much the lender will have to put in escrow will depend on where you live and the frequency of real estate tax collections. It could be anywhere from 2 to 12 months of real estate taxes that they need to put back. So, for example, if the taxes on the house are $250 per month, and a six-month escrow is required, that will translate to a prepaid expense of $1,500 at closing.

Insurance

Insurance also falls under prepaid expenses. For homeowner’s insurance policies, you’re typically required to prepay a one-year homeowners insurance policy on the house, plus an extra two months of premium charges to the lender’s escrow account. The lender may also escrow one or two months of premiums for PMI as well, if required. Depending on where you live, prepaid expenses may come to as much as two percent of the loan amount. Fortunately, Gresham homebuyers can have some or all of the prepaid expenses paid by either the seller or by premium pricing paid to the lender. Be sure to discuss your options.

Utility Adjustments

Although you may find yourself needing a large number of utility adjustments, this cost seldom comes to more than a few hundred dollars. An example of a utility adjustment cost would be that if a seller fills the heating oil tank just before the closing, you’ll be required to reimburse the seller for the unused oil. This will happen at the closing table. Similar charges can be incurred if the seller has prepaid other utilities, such as water, sewer, or trash removal.

Gresham homebuyers will also want to take inter consideration homeowners association fees. In many homeowners association neighborhoods, member fees are paid on an annual basis. If the seller has paid the fee for the full year, and you’re closing on the house partway through the year, you will be required to reimburse the seller for the months in which you are living in the house. There may also be a fee to the HOA to get started. They may call it a transfer fee or something similar.

Lender-Required Cash Reserves

Lenders will sometimes require Gresham homebuyers to have a certain amount of cash left in your savings after all costs are paid. This is to avoid a buyer “closing broke.” They don’t want you to end up in an early-term default. This requirement ensures that the borrower will be able to make their payment during the first few months. Typically, your lender will require you to have two months’ worth of payment in reserve. So if your principal, interest, taxes, and insurance (PITI) come to $1,500 per month, the reserve requirement will be $3,000. While these funds do not have to be deposited with the lender, the lender must be able to verify that you will have the funds available in a liquid source.

In conclusion, if Gresham homebuyers are looking to buy a $200,000 home, a 10% down payment is $20,000. The closing costs, which are the equivalent of 2.5% of the home’s costs after the down payment, comes to $4,500. Prepaid expenses, at 2% of $180,000, are $3,600. Utility adjustments can be estimated at about $500, and cash reserves at about $2,400. This would total at $31,000.

Before you begin saving a down payment for a house, you first have to know how much you’ll need to save. Plan to sit down with a mortgage lender who will let you know how much of a mortgage you can qualify for. Stonebridge Mortgage Group

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

Stonebridge Mortgage Group offers experienced loan officer and mortgage broker services in Gresham. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Buying your first home? We can help!

Call us today at 503.661.5580

 

 

How To Save For A Down Payment For Your First Home, Part 2

How To Save For A Down Payment For Your First Home, Part 2

Stone Bridge Mortgage Group_How To Save For A Down Payment For Your First Home, Part 2

One of the most important first steps Gresham locals can take towards home ownership is to begin saving for a down payment. Once Gresham home buyers know just how much of a mortgage they can afford, they should start saving for a down payment. By figuring out how much you need to save and how soon you’d like to buy a home, you’ll know just how much you need to save per year to put towards the goal of owning your own home.

Stonebridge Mortgage Group is eager to help home buyers in the Portland and Gresham area find the mortgage that is right for them and set our clients on the path to home ownership. Use our mortgage calculator to figure out the amount you can afford on a  mortgage loan, as well as how much you’ll need for a down payment. Then use the following steps to reach that goal of saving for your new home.

Make Room In Your Budget

You’re going to need to save a lot of money for a down payment, so you’ll likely need to either earn additional income, cut back on expenses, or both. Making room in your budget, though, will not only help you save the money you need for a down payment – it will also prepare you for managing for a tighter budget that is often required with homeownership.

Set Up An Automated Savings Plan

Automating the savings process can make it easier for Gresham home buyers to stick to their savings goal. Set up some sort of payroll savings plan. You should allocate a certain percentage or dollar amount of your regular pay to go directly into a savings account or money market account dedicated to accumulating the funds for your down payment. By making the process automatic, it also becomes invisible. The money goes directly into your savings account without you having to see it, which removes both temptation and the ability to spend those hard-earned funds.

Bank Your Windfalls

To make your savings easier, those looking to buy a home in the Portland or Gresham area locals should take any occasional windfalls and put them in the bank. This includes income-tax refunds, gifts received, bonuses, large commission checks, or even the sale of personal assets. This can help you make huge strides towards your savings goal.

Build Flexibility Into Your Savings Plan

Whatever the size of your required down payment for your dream home in the Portland or Gresham area,  home buyers should always be prepared and build flexibility into their savings plan. You’ll never know when there will be other demands on your finances. You can minimize stress on your finances by being prepared for unexpected emergencies. You may find yourself needing to cover major car repairs, replacement of a car, uncovered medical expenses, or even the temporary loss of a job. Establishing an emergency fund for such contingencies is not only smart but a necessity as a homeowner. In fact, before you even begin saving for a down payment you’ll need to be sure that you have an emergency fund in place.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For professional mortgage solutions, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We help you with the pre-approval process and assist with real estate loans and other mortgage services, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to buy your new home!

Call us today at 503.661.5580

 

How To Save For A Down Payment For Your First Home, Part 1

How To Save For A Down Payment For Your First Home, Part 1

Stone Bridge Mortgage Group_How To Save For A Down Payment For Your First Home, Part 1

 

One of the most important first steps Gresham locals can take towards home ownership is to secure a down payment. Once Gresham home buyers know just how much of a mortgage they can afford, they should put together a savings plan for their down payment — if they don’t already have that amount established or set aside. By figuring out how much you need to save and how soon you’d like to buy a home, you’ll know just how much you need to save per year to put towards your down payment.

Stonebridge Mortgage Group is eager to help Gresham home buyers find the mortgage that is right for them and set our clients on the path to home ownership. Use our mortgage calculator to figure out the amount of a mortgage loan you can afford as well as how much you’ll need for a down payment. Then use the following steps to start saving.

Make Room In Your Budget

You’re going to need to save a lot of money for a down payment, so you’ll likely need to either earn additional income, cut back on expenses, or both. Making room in your budget, though, will not only help you save the money you need for a down payment – it will also prepare you for managing the type of tighter budget that homeownership requires.

Set Up An Automated Savings Plan

Automating the savings process can make it easier for Gresham home buyers to save what they need. Consier setting up some sort of payroll savings plan. You should allocate a certain percentage or dollar amount of your regular pay to go directly into a savings account or money market account dedicated to accumulating the funds for your down payment. By making the process automatic, it also becomes invisible. The money goes directly into your savings account without you having to see it, which removes both temptation and the ability to try to spend what’s going into savings.

Bank Your Windfalls

To make your savings easier, Gresham home buyers looking to buy a home should take any occasional windfalls and put them in the bank. This includes income-tax refunds, gifts received, bonuses, large commission checks, or even the sale of personal assets. This can help you make huge strides towards your savings goal.

Build Flexibility Into Your Savings Plan

Whatever the size of the down payment, Gresham home buyers should always be prepared and build flexibility into their savings plan. You’ll never know when there will be other demands on your finances. You must be prepared for the unexpected emergency. You may find yourself needing to cover major car repairs, replacement of a car, uncovered medical expenses, or even the temporary loss of a job. Being prepared for these possibilities is necessary. In fact, before you even begin saving for a down payment you’ll need to be sure that you have an emergency fund in place.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For assistance with your home buying needs, look to the professionals of Stonebridge Mortgage Group for personalized mortgage services. You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves greater Portland is located in Gresham, Oregon. Ready to buy your first home? Stonebridge Mortgage Group can help.

 

Call us today at 503.661.5580

 

Tips for Gresham First Time Home Buyers, Part 1

Tips for Gresham First Time Home Buyers, Part 1

Stone Bridge Mortgage Group_5 Types of Mortgage Loans Every Homebuyer Should Know About

Buying a home for the first time can be an exhilarating and nerve-wracking experience all at once. On the one hand, buying a home means taking the first steps toward long-term stability. On the other hand, if you are underprepared for buying a home in Gresham, you could easily find yourself in over your head. Gresham locals looking to buy a home for the first time can feel more confident with the home buying process with Stonebridge Mortgage Group. We’re here to walk you through the steps you need to prepare yourself for buying your Gresham home.

Pay Off All Debt and Build an Emergency Fund

Even if the monthly house payments are similar or cheaper than the current cost of renting your home, owning a home is often still more expensive than renting. Gresham locals will find that, as a homeowner, you are responsible for all of the maintenance and upkeep costs. To make sure you can keep up with these costs, make sure you are debt-free and have an emergency fund of three to six months in place to cover the expenses that come with owning a home. Having an emergency fund to fall back on when huge expenses come your way means you won’t have to stress or worry about falling behind on house payments. Once your debts are gone, stay debt-free as long as you can manage. Gresham locals looking to buy a home should especially be wary of taking on additional debt in the middle of buying a house, because it could delay your approval for a mortgage.

Determine How Much House You Can Afford

Decide on a budget before looking for a home. When shopping for a home in Gresham, you don’t want to get too emotionally attached to a home you can’t afford. Make sure you have enough money not only to pay for your monthly mortgage, but also for HOA fees, taxes, insurance, and so on. Your monthly housing costs should be no more than 25% of your monthly take-home pay.

For example, if you bring home $5,000 a month, 25% of your monthly income is $1,250. Based on a 15-year mortgage with a 4% fixed interest rate, here are the home options you can afford (not including taxes and insurance):

  • $187,767 home with a 10% down payment ($18,777)
  • $211,238 home with a 20% down payment ($42,248)
  • $241,415 home with a 30% down payment ($72,424)
  • $281,650 home with a 40% down payment ($112,660)

Be sure to account for insurance and other fees in your monthly house payments.

Save for a Down Payment

When looking to buy a home in Gresham, it will benefit you most to save for a down payment of 20% or more. With a down payment of 20%, you won’t have to pay for private mortgage insurance, which protects the mortgage company in case you can’t make your payments and end up in foreclosure. There are first-time home buyer programs that offer lower down payment options, but they do end up costing you more in the long run.

The same thing applies to mortgage terms. With a 15-year mortgage term, your monthly costs will be higher but you’ll pay it off more quickly and save thousands of dollars. Carefully consider your options before making a final decision.

Save for Closing Costs

Gresham first time home buyers may be wondering how much closing costs typically are. On average, closing costs are about 3–4% of the purchase price of your home. Your lender will give you a specific number so you know exactly what to bring on closing day. These fees pay for important steps in the home-buying process, including:

  • Appraisal
  • Home Inspection
  • Credit Report
  • Attorney
  • Homeowner’s Insurance

You will need to be ready to pay the closing costs upon closing deal. So it’s important to have money for this saved ahead of time.

Get Preapproved for a Loan

Once you have your down payment saved, it’s time to secure the rest of your home’s costs by talking to a mortgage lender. Getting preapproved for a loan and having a preapproval letter when you start the search for your Gresham home gives you a huge edge. Preapproval shows sellers that you’re a serious buyer, which is a great way for first-time home buyers to get ahead in a competitive housing market. To get preapproved, your lender will need to verify your financial information (proof of income, taxes, etc.) and submit your loan for preliminary underwriting.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters in Gresham

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

How to Know if You’re Ready to Buy a Home

How to Know if You’re Ready to Buy a Home

Stone Bridge Mortgage Group_How to Know if Youre Ready to Buy a Home_06

Buying a home is a huge step — one that can lead you down the path to financial security. However, owning a home before you’re ready can be a step in the wrong direction. It’s not just about whether you can afford a home — ask yourself if you should and if you’re really ready for that level of responsibility. Here are a few questions to ask yourself before buying a home.

Are your finances in order?

Take into account your debts, whether you have credit card debt or debt from various types of loans. Remember that your credit score is what a bank will use to determine how much of a mortgage loan you’re eligible for. More than that, if you routinely find yourself with a lot of debt, it probably means you do not have the finances necessary to purchase a home. Clean up your debt first and get to a place where you’re more financially stable before taking on the responsibility of a mortgage payment.

Have you saved enough for a down payment?

Before you even consider looking for a home, you’ll need to need to have enough saved for both the down payment and the extra, sometimes unforeseen, costs. With the right qualifications, today you can buy a home for as little as 3.5% down. However, you’ll also need to have enough money to cover closing costs, insurance, taxes, and any necessary repairs. This could easily add up to thousands more than the down payment alone, so you need to be prepared.

Can you really afford the payment?

Can you really afford to pay all of the monthly expenses of owning a home? You may have been told you can own for the same price as renting. While the amount you pay in rent probably would be similar to the amount you would pay in principle and interest on your mortgage loan, however, there are other costs to consider. In addition to a monthly mortgage payment, you’ll have to pay property taxes, insurance, homeowner’s association fees, city assessments, water, sewer and/or garbage, and other utilities your landlord may currently be covering for you. Know your budget before you shop for a home and keep these costs in mind.

Are you ready to settle down?

Buying a home is a long-term investment. If you change your mind quickly and sell after only a few years, you’re losing money. Any increased value within the first few years likely won’t match the closing costs you paid for a home. Make sure you’re in a job you’re content to stay with for some time. You don’t want to buy a home only to change to a career that brings you to another city or state. A good rule of thumb is to be prepared to stay in your home for at least five years.

Can you fix a leak?

When you own a home, you can no longer rely on a landlord to fix sudden problems. You have to become self-reliant. If your sink begins to leak, or if your dishwasher breaks, you need to either be able to fix it yourself or have the resources to pay someone to fix it. If you can fix it yourself, of course, all the better – it’ll save you money in the long run.

Stonebridge Mortgage Group can advise you on your mortgage needs.

For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We also help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and are in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580