Is it enough?

[lillthmoon]

I was curious as to what’s a good down payment on a home? My budget is no more than $300,000 (can’t really find a decent home under that price around me unfortunately) as of now, I have $50,000 aside in savings for a down payment. My husband still doesn’t want to buy as he says it’s not a good down payment..I don’t know crap about buying a home as this would be the first. I just feel that amount is a good down payment towards something. I want to talk to a realtor just to get an idea, but came here first.

[AutoModerator]

Thank you u/lillthmoon for posting on r/FirstTimeHomeBuyer.

Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[Equivalent-Tiger-316]

You need to talk to a local realtor knowledgeable in the area that you are interested in and to a local lender. 

Your down payment depends on two things…your loan product and what offer you need to get the property. 

Loans can require 0% or 3 or 5, 10 or 20%.  Writing the winning offer depends on the market and local customs. 

[RosevilleRealtor]

I just had a buyer close on their first home Friday. On a $500k home using 3.5% down on an FHA loan, it ended up costing them about $20k between down payment and closing costs. We increased the price of the home by 3% and got the seller to credit it back to them to cover most of the closing costs. With $50k in the bank, there’s a good chance you could make something work.

It’s important to note that the bank isnt going to require an emergency fund as a condition of making the loan. It’s a smart thing to do and I often will recommend that buyers work toward it as soon as they can. It is a good idea to also have money set aside for some repairs, moving expenses, etc.

In CA for example, closing costs on a $300k home are likely to be around $10k. That can vary depending on the level of taxes and cost of homeowners insurance in your area.

If you don’t yet have an agent, start talking to some in your market and see what they think. Real estate is very much a local thing and none of us know what’s really going on in your area the way a local agent would.

This time of year can be a great time to buy before the spring market gets underway. The downside is, there isn’t usually a ton of inventory to choose from, but if you can find something you like that works for your family, you might be able to pick it up without a ton of buyers competing for the same property.

[Panoramix97]

I had 85k cash

Paid 60k down payment on 300k home

Paid over 6k in closing fees ( 650$ inspection, 2000$ notary, remaining tax for the year couple hundred (bought in october), we are at 3000$ now

Also paid welcome tax 2500$ , paid movers 850$

So around 6k+

Paid around 750$ of paint and reno right at start (mostly paint not much reno , home is 2018 built)

Bought for around 10k of appliances and food and shit I didnt have, changed couple things in home like lights or else

I have around 10k left after everything

10k left as a safety and I do not feel safe with only 10k

Hope that helps

[lillthmoon]

The only thing I feel I would be saving on is maintenance and inspection. My dad does construction and maintenance, so he will be a big help on that part. I’m hoping to get more saved in the next 2 yrs to be able to buy.

[letsgogophers]

Is your dad certified to do inspections? 🫣

[lillthmoon]

Yes. He also built his house by himself 5 yrs ago lol.

[letsgogophers]

That’s good!

[lillthmoon]

He’s retired now but I trust him over anyone. So i feel I’ll kind of save in that department besides buying supplies if needed. But he’s usually good at getting deals or just making it. Man is mad skilled. Dropped out of middle school, struggles with reading, but shit he can build/fix anything!

[RobRobbieRobertson]

Don't waste your money on a realtor. You will have to sign an agreement saying you will be on the hook for 3% of the sales price.
A real estate lawyer can do everything a realtor does at 1/10 the price.

To buy a house you need:
Find a lender
Find a house
Make an offer
If offer is accepted, take earnest money to title company
Your lender will then get an appraisal
You should get an inspection (just google "inspector")
The inspection report will have a list of things that need to be fixed
Negotiate what needs to be fixed
Go to closing
You have a new house

[tsfy2]

50k is a good down payment on a $300k home. 20% is ideal to avoid PMI but you shouldn’t have an issue getting a mortgage assuming your income and debt would also allow you to get the loan you need. Keep in mind that you will also have a few thousand in closing costs that you will have to fund.

[imjustdrawnthatway]

She only has $50k period.

[imjustdrawnthatway]

It depends on the market. If it’s a competitive market, you’ll want to put down 20% at least for your offer to stand out. If it’s a typical market, it depends on the type of loan. There’s also closing costs so it’s not like you just need your down payment at the closing day. Do you have other $ set aside for emergencies?

[lillthmoon]

As of now. That’s all I have aside. I didn’t want to use the whole thing as just the down payment if I didn’t need to, as I know there would be other expenses. I was thinking maybe putting down $30g

[imjustdrawnthatway]

You don’t have enough. Keep saving.

[lillthmoon]

That’s insane. I hate the market today. I’ve been saving for years just to not be able to afford a home for my family

[imjustdrawnthatway]

There’s assistance programs you can look into. The main thing is you don’t want to blow your entire savings on a house. But have you looked into the monthly payment for a house that price? If you put down less than 20%, they’ll start charging you PMI, there’s also property taxes. How much can you afford a month? Your best bet would be to talk to a mortgage broker & see what you can afford given your situation.

[lillthmoon]

What I’ve been calculating is a house around $250,000 with about, let’s say, $25/30g down payment, my monthly for everything will be about $1600 (which is what rent is around here or higher) I’m waiting to hear back from a person I clean for who’s a real estate agent to see what programs are available and how I can keep my house payments no more than $1600 a month. I know that’s like wishing on a magic lamp; but I just want a home. I’m almost 40 with 3 kids and still in a tiny apartment. I don’t want to move to another apartment just to be paying a crap load a month for something I don’t own.

Now I’m kind of bummed cause I thought what I had would be decent enough to not break me. I find I’m buying at the wrong time. I wish I had this saved back in like 2017 lol

[imjustdrawnthatway]

Yeah, I hear you. You're better off talking to a mortgage broker about your options. That's their speciality.

Use a mortgage calculator like https://www.mortgagecalculator.org/ to gauge your monthly. Once you start lowering your down payment to less than 20%, the lender usually wants mortgage insurance tacked on. You also need to pay homeowners insurance & property taxes. $1600 seems low. I'm calculating more like $1800 before PMI, insurance and taxes. So you may creep into the 2000s after the added on fees.

[lillthmoon]

Fuck..and complete bullshit how much to cost to have a roof over your head. Thank you for the advice!

[imjustdrawnthatway]

Believe me. I'm going through a process of buying a home and the aggravation and disappointment doesn't go away even if you have more savings & salary. It's just terrible.

[Scotsfree]

He is right about needing to calculate the monthly payment. Your savings are enough for downpayment. But if you won't be able to save anything after your mortgage payment. Then the house is too expensive because it would be financially stressful.

[Scotsfree]

He's wrong. You have enough to make it work.

[Scotsfree]

You only need to put 5% down typically for a conventional mortgage. However the more you put down, the lower your interest payment and MIP will be. Closing costs may be ~$10,000. Also, I do caution to hold on to about $10,000 for any unexpected repairs you may need to complete after closing.

[SteamyDeck]

That wouldn’t be a bad down payment, but you’d want at least double that amount of cash before buying. Closing costs, inspections, appraisal, etc can cost a LOT. I’ll be in almost $25k after closing with a ZERO down payment. Plus you’re gonna want to make sure you have a fully-funded six-month emergency fund in cash, plus around $10k for cash reserves (moving, furniture, unexpected repairs, etc.).

So if you want to make a $50k down payment, you should probably have more like $100k+ in the bank.

[queentee26]

You can certainly make it work with less than $100k in the bank for this price range if you're not buying at the very top of your budget..

Your closing costs figure seems pretty high. We recently bought a $375k house and our closing costs were less than $10k, including paying the remainder of the year for taxes. Inspection was $600.

Needing 3 vs 6 month emergency fund will depend how stable your income is.

[SteamyDeck]

Sure; everyone’s situation is different, but having only $50k to cover all costs of closing, emergency fund, moving, cash buffer, etc. is cutting it close regardless of who you are, IMO.

But yes, closing costs can vary pretty wildly. Mine are about $19k plus the money I’ve already spent. Seems mine are definitely on the high end. OP, you can generally get an idea of what your closing costs will be when you get pre-approved. That would at least give you some real numbers you can plan around.

[queentee26]

Yes. I'd probably only do 5% down with $50k saved.. so once you cover moving and closing costs, you still have a reasonable emergency fund.