How much money do I need to have in addition to downpayment in order to proceed obtaining financing?

Question: I have been saving for a downpayment on my first home. How much money do I need to have in addition to the downpayment in order to proceed obtaining financing?

 

 

Answer: In the calculation of how much you will need to purchase a home, be sure to add the down-payment and closing costs. You will also need to leave yourself with a financial cushion to cover incidental expenses.

 

First, you will have to pay a moving company unless you have friends with strong backs to help you. You may also find that you will wish to do some work to your new property, such as painting, replacing carpet or refinishing floors. If you are moving into a larger space, you may find yourself making some major furniture purchases within a few months of closing.

 

A financial cushion is important enough that some lenders require buyers to have an amount in the bank equivalent to two or three months mortgage payments. This is especially true for buyers who are putting less than 10 percent down. Your Realtor can give you some guidance. A lot depends upon your overall financial situation. If, for example, your mortgage is a relatively low percentage of your monthly income, you will be able to rebuild a comfortable amount of savings in a few months.