QUICK REFERENCE FOR PURCHASING A HOME
The following information is for quick reference only, there are almost always exceptions or options that will allow for variations from information below;
CLOSING COSTS
Total for closing costs and escrows will average 5% to 6% of the price of the home which includes items referenced below
Transfer tax = 1% of the sale price ( often 2% on HUD/ Bank Owned properties )
Bank fees average $450 plus Discount or Origination costs ( appraisal, processing, flood cert, etc, )
Title Insurance costs reference –
$100k = $859 $150k = $1,109
$200k = $1,364 $250k = $1,608
$300k = $1859 $350k = $2,108
Home Owner’s Insurance averages $600 on a $250,000 home (add for pools, sink hole coverage, etc)
Real Estate Taxes average 1% - 1 % of the value of the home. Typically, the purchaser will need to bring one full year of taxes to allow for prorations plus escrows
Mortgage Financing Information
A minimum down payment of 5% of the price of the home is required for most programs, however, 100% financing is available to qualified buyers
Qualifying ratios are not as important as how much per month the client is willing to pay for mortgage payments. Traditional qualifying ratios are 33% of gross income for the mortgage payment and 42% of gross income for all recurring debt .
Mortgage payment buying power based on a 30 year fixed rate mortgage ( before taxes and insurance) assuming a 6.5% interest rate:
Monthly Payment Borrowing Power Monthly Payment Borrowing Power
$ 633 ( Taxes & Ins,) $100,000 $1,899 ( T&I ) $300,000
$ 949 ( T&I ) $150,000 $2,215 ( T&I ) $350,000
$1,266 ( T&I ) $200,000 $2,532 ( T&I ) $400,000
$1,582 ( T&I ) $250,000 $2,848 ( T&I ) $450,000
REMEMBER: A detailed Good Faith Estimate of closing costs and monthly payments is required as part of the Agreement Of Sale. Please see your Gold Services Manager for detailed information at 610.252.6666 Ext 110. Just ask for Rich or Mike.