How Much Cash Do You Need to Buy Your First Home in Northern Utah?

If you’re saving for your first home, you might be wondering how much money you’ll need before you can start looking.

Your down payment is one part of the picture, but it’s not the only expense to plan for. You’ll also want to consider closing costs, money due earlier in the process, and what you’d like to have left in savings after you move.

Here’s a simple way to break it down.

1. Your down payment

Your down payment is the portion of the purchase price you pay upfront rather than finance with your mortgage.

The good news is that you don’t necessarily need 20% down. Some loan options allow eligible buyers to put less down. The right amount depends on your situation, the loan program, and the property.

A smaller down payment may help you keep more money in savings, but it can also affect your monthly payment and mortgage insurance. It’s helpful to look at those numbers together before deciding what feels comfortable.

2. Closing costs and prepaid expenses

Closing costs are separate from your down payment. Depending on your purchase, they may include lender charges, appraisal and title services, and recording fees.

You may also need to pay for items such as homeowners insurance and prepaid interest, along with an initial deposit into an escrow account for future property taxes and insurance.

These amounts are included in the closing-cost breakdown on your loan documents. Ask for an itemized explanation so you understand what’s included and don’t count the same expense twice.

3. Money you may need before closing

Some expenses may be due before closing, including your earnest money deposit and a home inspection.

Earnest money is generally credited toward your purchase at closing, but you’ll need it available when your contract requires it. Your contract also sets out what happens to the deposit if the purchase doesn’t go through, so talk with your real estate agent about those terms.

4. Your estimated cash to close

“Cash to close” is the amount you still need to bring to complete the purchase after deposits, applicable credits, and other adjustments are considered.

For example, earnest money you’ve already paid generally reduces the amount remaining at closing. A seller credit may also help with allowable closing costs if it’s negotiated and permitted by your loan program.

Your Loan Estimate gives you an early breakdown, and your Closing Disclosure gives you the final terms and costs to review before closing. If a number changes or doesn’t make sense, ask about it.

5. What you’ll have left after closing

Don’t forget about moving expenses, utility setup, furniture, repairs, and everyday life after you get the keys.

Some loans also require reserves, which are eligible assets you have left after closing. Reserves aren’t another fee paid to the lender, and requirements vary. Even if they aren’t required, it’s a good idea to think about how much you’d be comfortable keeping in savings.

What about down-payment assistance?

There may be assistance options available to qualified buyers. Some are loans, while others may have different terms. Before including assistance in your budget, ask about eligibility, repayment, and availability.

Where should you start?

Whether you’re looking in Ogden, Layton, or elsewhere in Northern Utah, start with these three questions:

• What might I need to pay before closing?
• What is my estimated cash to close?
• How much will I have left afterward?

If you’re thinking about buying your first home and aren’t sure where to start, reach out. I’d be happy to help you understand the numbers and explore your options.

Juli Gleed | Village Mortgage Inc.
Company license: 5492546-NMLC | NMLS 91658

Loan options and assistance are subject to eligibility, underwriting, program requirements, and availability.