Real NEastate: How much money do I need to buy this Tacony home?

I am thinking about buying a house for sale in Tacony. I am paying $1,200 in rent currently and I know owning would cost me a lot less than my landlord collects, but I don’t have a lot of money saved. I am getting a mortgage, but if I am offering $100,000 for the house, how much actual cash will I need to buy it?

A: You should check with a couple mortgage lenders to explore the best loan scenario for you. There are several different factors that could affect the amount of money you may need to purchase this home. Which loan you choose, homeowners insurance, your lender’s fees, and even the time of month you purchase can make a difference in how much money you may need.

For instance, if you get an FHA loan product with a minimum 3.5 percent down payment, you will need between $10,000 and $12,000 roughly to purchase this $100,000 home in Tacony. The bulk of the money will go to paying closing costs such as the 2 percent transfer tax, mortgage insurance protection and title insurance. The good news is your monthly payment will likely be less than $800 since the mortgage interest rate is so low right now.

If you don’t have that kind of money in the bank, it is possible to craft the loan to include “Seller’s Assist.” That is a factor in the loan product which allows the seller to “pay” for a portion of your closing costs so that you can afford to buy the home. Usually the lender will cap this amount to no more than 3 percent or 6 percent of the price of the home.

Ultimately, even if the seller of the home agrees to this form of financing, you will still need at least the 3.5 percent down payment money on the FHA loan. In this case, it is $3,500 plus the cost of out-of-pocket costs, such as home inspections (about $400 to $600) and mortgage appraisal (about $450). Additionally, you may be able to receive a monetary “gift” from a family member if it’s allowed by your lender.

Good luck!

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 hereRead other NEast Philly columns here.

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