If you’ve ever closed a listing after thinking, “I’ll come back when I’ve saved 20%,” I’d like you to run the numbers before you put your home search on hold.

Twenty percent gets talked about so often that it can feel like the price of getting in the door. But some conventional loans allow 3% down, and FHA loans can go as low as 3.5% for qualifying buyers. On a $325,000 home, that’s $9,750 at 3% or $11,375 at 3.5%. The next step is figuring out what you’d actually need at closing and what you’d have left afterward. Consumer Financial Protection Bureau

Start with what you want left in savings

When we talk about your budget, I like to start with the week after closing. You’ve got the keys. The movers are coming. You realize the house needs blinds in every bedroom. How much would you want in the bank that week?

Say you’ve saved $30,000 and want to keep $8,000 available for moving and unexpected expenses. That gives you $22,000 to work with for the down payment and closing costs. If you put 3% down on a $325,000 home, you’d have $12,250 of that budget left for closing costs. That’s a starting point you can take to a lender and compare with a real estimate.

Closing costs typically range from 2% to 5% of the purchase price, according to the Consumer Financial Protection Bureau. On that same home, the rough range is $6,500 to $16,250. The estimate matters because a few thousand dollars can make the difference between keeping the cushion you wanted and dipping into it before you’ve even moved in. Consumer Financial Protection Bureau

Compare two payments before you decide how much to put down

I’d ask your lender to show you two scenarios on the same home. Start with the smallest down payment you qualify for, then look at an amount you could comfortably put down. Compare the estimated cash to close and the full monthly payment in both cases. Ask where mortgage insurance shows up and how much it adds. With a conventional loan, it generally applies when you put down less than 20%. Consumer Financial Protection Bureau

You might decide the lower monthly payment is worth using more savings. Or you might want that money available because you’re moving from out of town or buying a home that needs some work. Either way, you’ll know what you’re getting in exchange for the extra cash upfront.

Bring those numbers to your home search

Once you know what you can comfortably bring to closing and what payment fits your everyday budget, it’s easier to narrow the search. If you find a home you love but the cash to close is tight, we can talk about whether asking the seller to contribute toward eligible closing costs makes sense for that offer.

If you’re starting to look in Hampton Roads and aren’t sure what price range feels right, I’m happy to talk it through with you. Get in touch with Katie Burke Homes.