Down Payment (Happy: real estate, HOA, homeowners insurance)

[Cabear16]

How much money do I need stashed away to be comfortable putting 20% down on a 185k house? Is there some sort of percentage I should have in the bank to avoid being "house broke.". I have little to zero debt and my expenses are very low (no car payment and my gas/Internet/phone is paid for).

[mamacatnv]

There are several mortgage calculators online.
The biggie to add in is going to be the cost of the property taxes. We just purchased a home with a 2.75% tax rate. The rate is calculated on the value of the home (I believe) not the amount of the loan.
The quotes I received on Homeowners insurance on a $160K home were $1,000-1,200 per year.
Don't forget about HOA fee's - we saw fee's ranging from a few hundred dollars a year to a few hundred dollars a month depending on community & amenities.

Use the mort. calculate then add in your taxes & insurance and you should have a decent idea of where your loan payment will be. The lending limits vary as does the advice of what the ratio of gross income to house payment should be. I believe that 30-50% of your gross is generally the guideline. I also read recently that the total price of the home should not exceed 3 years of your annual gross - some areas of the country were higher but TX I believe was 3X's.

I have also heard that if using FHA or other "non-conventional" loans that PMI is automatic regardless of amount of down payment. I do not know if that is true, its something I heard. We used FHA and PMI was required.

Happy house hunting

[Cabear16]

Thanks for the quick feedback. I guess what I'm really asking is that after I pay the down payment, closing costs, etc UPFRONT, how much of a percentage of cash should I have readily available? Is there some general rule of thumb?

[Cabear16]

And I just read your entire post.... I see now. Thanks!!!

[EzPeterson]

A safe number is 10% of the purchase price in cash or liquid asset.

[Austin97]

6 months of living expenses

[dave bacon]

Originally Posted by Cabear16

How much money do I need stashed away to be comfortable putting 20% down on a 185k house? Is there some sort of percentage I should have in the bank to avoid being "house broke.". I have little to zero debt and my expenses are very low (no car payment and my gas/Internet/phone is paid for).

I can tell you the minimum a lender would REQUIRE Cabear:

Assuming you can get the seller to pay your closing costs you would need 20% OF 185,000 or 37,000 down payment and 2 mos piti reserves (principal, interest, taxes and insurance), in this case about 2500 depending on rate, tax base, hoa, etc., so about 40,000 could swing it. To be comfortable???

[mesmer]

50k seems about the minimum, assuming that you'll be able to continue to put a little into savings every month even after you buy the house. That'll cover six months of house expenses with a little left over for a tight food budget in a job loss scenario. 55k-60k is probably better, but you'll need to weigh the cost of waiting for the perfect amount of money in the bank vs. the rising cost of austin real estate.

[Cabear16]

10% of the purchase price sounds about right to be completely safe. Thank you all for the help