Buying a home is one of the most important decisions you can make, and you want to make sure you have enough saved to buy a decent home before you start looking. The amount you need will depend on a few factors. If you are wondering how much money you should save before buying a home in Idaho, then keep reading.
Let’s take a look at a few scenarios so you can see the amount you should be saving up. The average home price in Idaho is in the 400k range, and you typically are required by the lender to put down 20% of your total purchase price in order to provide the down payment. A down payment requirement of 20% means you will need about 80k as your down payment to qualify for most major lenders.
Condo might be a cheaper option comparing single family home. Boise condo median price is $200k. You may even find a premium condo in downtown in this budget. It cuts your cost to half. You can get into your home just by paying $40k downpayment.
Your other option could be to pay for private mortgage insurance to ensure that the loan won’t be too risky for the lender. A loan with a private mortgage company will require you to put down about 5%-15%, so for a 400k home, you will need between 20k to 60k saved up.
There are also loans through different services (such as an FHA loan) that can require even less down, but these loans are typically more expensive in the long run. If you have good credit, then this might be the best option for you, as your rates will likely be much lower.
There are also a few situations where you may not be required to provide a down payment at all. USDA mortgages and loans that are going through the Veterans Association typically do not require a downpayment, but it depends on the borrower’s financial situation.
Should I just save up my down payment?
All of these lending options do not include closing costs which could be in the thousands depending on what is needed. Your dream home might come at a good price but you need to factor in extra costs.
Home Inspections: $360 per visit
Home inspections are necessary for so many reasons, and they are usually paid for by either the seller or included in the final sale price from the buyer and then paid out by the realtor. There are different types of inspections that might be required and others that are optional, plus some inspectors might need multiple visits to ensure a problem has been fixed. Costs for inspections might end up in the thousands, but at least you can be sure that your home has been checked out by an expert.
Minor repairs: $200+
Unless you are buying a freshly built home, it will likely need some minor repairs that might set you back a few hundred dollars to start out with. Broken steps, peeling paint, and dingy grout can be easily repaired or fixed. These costs might not seem like much when you are doing your initial walk-through, but if repairs need to be made immediately, then you need to budget that into your final cost.
Major repairs $500+
Sometimes those minor repairs can end up being more extensive than you originally expected. A home inspector can tell you what will need to be up to code, but they won’t be able to see things like calcified pipes or interior roof damage when they do a walk-through. Some of these repairs can end up costing you thousands of dollars, and you might not be able to live in the home while they are being completed. If you are choosing to use your new property for a rental property, this could also result in thousands in lost rental income if the repairs take too long.
Taxes and Legal Fees: $2000+
Taxes and legal fees are unavoidable, but the cost will depend on how much you paid for your property and how much you needed your lawyer. Some lawyers have a flat rate fee, whereas others will charge for each service they provide (or hours worked), so it’s hard to gauge how much you will need to pay for them. There can also be land transfer fees that come into place so ask your lawyer about what extra closing cost fees you can expect.
On top of all of these costs, you still need to have an extra chunk of change in case you have a significant issue that isn’t covered by your insurance yet. If your A/C goes out or your washing machine starts to spew water, then you need to have some money aside to replace it so you can live comfortably.
There is no magic number you need to save up for your Idaho home, but it’s a good idea to save up as much as possible. Take all of the extra costs into consideration to ensure that you don’t drain your pockets when it comes to finishing up the sale.