How Much Money Do I Need to Buy a Home?
Home buyers ask me all the time how much money they really need to purchase a home.
The answer is always: "That depends..."
Your home price (Affects down payment, due diligence & earnest money)
Down Payment (Loan type, personal preference)
Number/Type of Inspections (Impacted by age of the house)
Area of Purchase (Taxes/Insurance/HOA)
Loan (lending fees, choosing to pay down the interest rate, etc.)
What's My Down Payment Going to Be?
Again, it depends on your loan product. Unless you pay cash for a home, here are your options.
Conventional loan: As little as 3% down (for buyers with best qualifications, i.e. low debt, higher credit scores)
VA loan: As little as 0% down (for military veterans, VA funding fee required, but rolled into the loan)
FHA: As little as 3.5% down (this loan is for buyers with lower credit scores and a higher debt-to-income ratio)
USDA: As little as 0% down (only on eligible homes in specific, rural areas, can take as long as 60 days to close)
Here's a chart to explain when the money flows out (if you're buying an existing home, new construction is a bit different). Pay special attention to Due Diligence & Earnest Money.
(**NC has both Due Diligence and Earnest Money, SC only has Earnest Money, but the 1% anticipated amount is the same.)