How much money will I need to buy a house in Northeast Philly? [Real NEaste]

PlanPhilly staff

May 1, 2013

My fiancé and I are looking to buy a house, but we have very little money to put down. Her parents have agreed to help us out with a down payment, but I am not sure how much we will need. We are looking in the Northeast under $200,000. How much do you think I will need?

A: The first thing you should do is talk to a mortgage lender and get pre-approved. The amount of money you will need may vary by lender and depends on a number of factors, like which loan you can qualify for, and even your settlement date. If you are unsure of how much you will need, ask your mortgage lender.

Also, different mortgage lenders have different loan products. Usually the least amount a lender will require is 3.5 percent of the purchase price if you get an FHA loan. I have seen loans that require less down, but it will depend whether or not you meet their qualifications.

Don’t forget you will still need money for the costs associated with closing, such as title insurance, homeowners insurance, transfer tax (2 percent in Philadelphia), home inspections, taxes reimbursed to the seller, and the lender charges associated with your loan. Some lenders will allow the seller to pay up to 6 percent for a portion of these costs, Seller’s Assist, if the seller agrees.

Below is an example that includes all the costs associated. This table shows how much you will need based on an FHA loan with a 3.250 percent interest rate on a $200,000 home with $2000 yearly taxes and closing at the end of May:

TRANSACTION ESTIMATED COSTS
Purchase Price:	$200,000.00
Closing Costs:	$11,099.98
Lender Escrows:	$998.98
TAX Reimbursments to Seller:	$1,176.89
Total Acquisition Costs:	$213,275.85

Mortgage Amount:	($193,000.00)
MIP Financed:	($3,377.50)
Total Mortgage Amount:	($196,377.50)
Seller Assist:	($0.00)

Estimated Cash Needed to Purchase:	$16,898.35
Earnest Deposit:	($0.00)
Prepaid Services:	($1,055.00)
Estimated Cash Needed at Settlement:	$15,843.35

ONGOING MONTHLY PAYMENTS
Principal and Interest:	$854.65
Real Estate Taxes:	$166.50
Homeowner’s Insurance:	$0.00
Mortgage Insurance:	$209.08
Condo / HOA Fee:	$0.00
Estimated Monthly Payment:	$1,230.23

*These figures are estimated settlement costs only. These will be adjusted as of the date of the final settlement, if necessary. The estimated monthly payment may be higher or lower because of the mortgage interest rate, type of loan and/or length of term of repayment. Buyer should consult the mortgage lender regarding exact mortgage costs and terms.

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.

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