How Much Money Do You Really Need to Buy a Home in La Puente, CA?

One of the biggest questions I hear from people thinking about buying a home in La Puente is this:

“How much money do I actually need?”

It is a great question. And the honest answer is: it is more than just your down payment.

Let me break it down so you know exactly what to expect before you start looking.

Start With Your Down Payment

The down payment is the amount of money you pay upfront when you buy a home. The rest comes from your mortgage loan.

A lot of people think you need 20 percent down to buy a home. That is not true.

Here are the most common options:

Conventional loan: You can put down as little as 3 to 5 percent. On a $650,000 home in La Puente, that is $19,500 to $32,500.

FHA loan: You can put down as little as 3.5 percent if your credit score is 580 or higher. On a $650,000 home, that is about $22,750.

VA loan: If you are a veteran or active duty military, you may qualify for zero down. No down payment at all.

The lower your down payment, the higher your monthly payment will be. But many buyers find that getting into a home sooner with a smaller down payment works better than waiting years to save 20 percent.

Do Not Forget Closing Costs

This is the part a lot of first-time buyers forget.

Closing costs are the fees you pay when the sale is finalized. They usually run between 2 and 3 percent of the purchase price.

On a $650,000 home in La Puente, that is roughly $13,000 to $19,500.

Closing costs include things like:

• Loan origination fees
• Title insurance
• Escrow fees
• Home inspection
• Appraisal
• Prepaid property taxes and homeowners insurance

Some of these fees can be negotiated. In some cases, a seller will agree to cover part of your closing costs as part of the deal. That is something worth discussing when we put together your offer.

You Also Need Money Left Over After Closing

Lenders want to see that you will not be completely broke after you buy the home.

Most lenders want you to have at least two to three months of your future mortgage payment sitting in savings after your down payment and closing costs are paid. This is called your reserve.

It is also just smart. You do not want to move into a home with zero cushion in case something needs to be fixed.

What Does It Add Up To?

Let me give you a simple example for a $650,000 home in La Puente with a 5 percent down payment:

• Down payment: $32,500
• Closing costs (estimated): $16,000
• Reserve cushion (2 months): $5,000 to $6,000

Total you want to have available: around $54,000 to $55,000

That number can be lower if you get seller credits toward closing costs. And it can look different depending on the loan program you qualify for.

The point is: know your number before you start shopping. It makes the whole process less stressful.

First Step: Talk to a Lender

Before you start touring homes, get pre-approved with a lender. This tells you exactly what you can borrow, what your down payment needs to be, and what your monthly payment will look like.

It costs nothing and takes about 30 minutes. And it is the single most important thing you can do before you start your search.

Once you have that number, reach out to me and we will start finding the right home for you in La Puente. xprtrealestate.com.