Profile picture for user9151509

Getting estimate of cash required for mortgage

I am trying to create a ballpark figure for how much money I will need to get a mortgage on a condo. I plan to buy the condo in one year. Please let me know if I have missed anything.

Down-payment: 0-20% of purchase price, depending on credit and other factors
Closing costs: 2-5% of purchase price
Cash reserves: 3-6 monthly mortgage payments

Thank you.

  • January 22 - Houston
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Answers (7)

That's about right, but you will typically need 3.5% or more of the purchase price for down-payment.

You may be able to get seller to pay some closing costs or pay a slightly higher interest rate and get it rolled into the loan.

This is one you will live in yourself right?   Otherwise down payment might be 25-35% if investment property.
  • January 24
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As you know, the down payment costs will depend on the loan you choose. If you choose FHA then expect 3.5% down, VA and USDA will be 0%, and conventional will be anywhere from 5%-20% down. Also, this is assuming that this will be your primary home and not an investment property. If it is an investment property than the cash required will be higher. Also, closing costs can be hard to predict but it can be up to 6% or 6.5% in some cases. Lastly, cash reserves will depend on how strong your finances are. The best thing for you to do is to speak with a lender such as myself to see if you can get started on financing a new home. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • January 22
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It's tough to put a number on closing costs. Are you paying points to buy your interest rate down? How much are your property taxes, HOA, and homeowner's insurance? When are your taxes due? Texas has no tax stamps that I'm aware of so you're good there. What are the origination charges? Are you getting seller concessions? If putting less than 20% down, will you be paying your mortgage insurance as a single premium?

I'm not trying to be rude at all, just explaining that there are many different factors that go into it. I would advise putting at least 5% down (conventional loan) and keeping 3-6 months of cash reserves, not only for you mortgage but for all of your bills. 
  • January 22
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Profile picture for JoshBarnettREIB
Loan can be as little as 0% on a VA Loan.

Closing costs around 5k typically.

Cash reserves depends on the loan type. 
  • January 22
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Profile picture for Owens Realty Group

This will depend on the price of the condo and whether or not it is for investment purposes or personal. You should expect at least 3% at a very minimum. Cash reserves will depend on your credit score; lower score will require hire reserves; investment properties will require even higher reserves. However, I am not a lender and cannot give 'true' or official lending advice. As Tim mentioned earlier, go ahead and contact a mortgage broker now to have a much better idea of what to expect. Best of luck!

  • January 22
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Profile picture for user9151509
Okay, that is good advice. Thank you.
  • January 22
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Profile picture for Outer Banks N C
You should just go see the loan officer at your bank and get some real numbers from them on a purchase and loan. You will need to find out what it will require and these person can really tell you. You will need to do it someday, why not start now?

  • January 22
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