CASH

Cash is a key component of a borrower’s qualification. Both your realtor and loan officer should make sure that you have enough money to purchase the properties you are looking at. Aside from the down payment you may also need to show reserves or assets left over after purchasing a property. The amount of reserves required will depend on the loan program and type of property you are purchasing. Many times lenders will use a multiple of your real estate related payments such as 3 or 6 months of mortgage, taxes, insurance, and maintenance fee payments. 


Aside from down payment and reserves there are many costs to purchasing real estate that buyers, and especially 1st time home buyers are not aware of. Along with the down payment and reserve buyers must account for paying for a home inspection, lender fees, escrow fees, title insurance, home insurance premiums, maintenance fees, etc. These fees can run between 1.5%-2% of the purchase price of a property depending on the vendors used, type of property, as well as the escrow and title company. Buyers must also take into account if they plan to buy down their interest rate on their loan and pay points. See Rate and Points section.