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.
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.
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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 6–month escrow, you’ll need an additional $1,500 to cover prepaid expenses.
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.
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 two–month 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.