Budgeting for a New Home

The American Dream. Your nest, your castle, your upsize, downsize. The biggest investment of your life. Ownership, equity and long-term security. These are just a few reasons, among many, Americans want to buy a new home. If you’re getting ready to buy a new home in Tampa, here are some tips:

Down payment? Conventional wisdom tells you 20 percent of the home’s price; a $200,000 sale price means you’ll need to have $40,000 in cash. That’s not true. You can buy a home with as little as 3.5 percent down payment with a Federal Housing Administration (FHA) loan with a 30-year fixed-rate mortgage; those are capped for homes priced at $314,827, some exceptions apply.

Closing costs? For these fees, you’ll typically need 2 to 5 percent of the home’s sale price added to the home’s final price. Those fees include your home inspection, property taxes and prepaid interest. Lennar Tampa also offers closing costs up to $14,000, varying by community.

Mortgage payment? Monthly home payments for most people shouldn’t exceed 29 percent of their monthly gross income, the FHA advises, or as high as 41 percent for those with no debt. It’s always a great idea to have a calculator on hand, especially one that calculates “mortgage amortization,” which can tell you how much you’ll pay in principal and interest during the life of the loan, be it 15 or 30 years.

Finances: Now it’s imperative you know your credit score. That will determine the lender’s willingness to lend you the money you need to borrow to buy your dream home. Your credit score also helps to get you pre-approved for your loan. When you fill out your mortgage application, the lender will pull all of your information.

In our homes, Everything’s Included®. It’s a signature Lennar innovation where features are built-in; other homebuilders offer the same features as add-ons, passing higher costs to you. Likewise, we have all the resources you need to help you with your dream. We’re here to help your family. In purchasing a new home from Lennar, you become part of ours.

To learn more about what you need to buy a new home, check out the following articles from 2018: CNBC here, The Street and Bankrate. And, of course, visit our website or call (877) 475-3662 and like us on Facebook for industry news, homebuying tips and more.

Anna Young