Thursday, June 18, 2020

How Much Vacation Home Can I Afford?

When purchasing a vacation home at Lake of the Ozarks, one of the first questions to ask yourself is how much can you afford to put into a second home. You already have a pretty good idea of the costs involved with your current home, but it’s important to not just look at the monthly mortgage payment. In addition to a monthly mortgage payment, you will also need to figure out the upfront home buying costs, the closing costs, and the regular homeownership expenses. Here is a quick overview of costs that come up through the start of your mortgage and how to prepare for these when you are purchasing your second home at Lake of the Ozarks.

Upfront Buying Costs

Your monthly mortgage payment is only one piece of the puzzle when you are figuring out how much you can afford to pay for a vacation home. A few of these are going to be the Inspection and Appraisal fees, the earnest money, and the down payment.

Earnest Money - this is your initial deposit on your home. It can be beneficial because if your offer is accepted, it can put weight behind your purchase. Also, if your offer is one of many bids, the earnest money put down could give you some advantages with the seller’s decision.

Down Payment - generally, the more you pay down, the better your mortgage rate can be. A 20% down payment is ideal, but down payments can be higher or lower than that depending on the loan program you qualify for and how much you have saved for the down payment.

Closing Costs

A good rule of thumb is that your final closing costs will typically range from 2-4% of the total loan amount. Here is a quick overview of what can be included in closing costs - depending on many factors:

  • Mortgage Origination Fees
  • Attorney's Fees
  • Inspections and Surveys
  • Title Insurance and Title Search
  • Recording Fees
  • Appraisal Fees

Expenses Associated with Homeownership

There can be many additional costs included with owning a home, some are obvious, some may get forgotten while you are working through your budget. It’s important to be informed on all of the costs of homeownership before committing, so let’s take a look at some of these:
  • Mortgage Insurance
  • Home Owner’s Insurance
  • Utilities
  • Repairs
  • Property Taxes
  • Home Owner Association Dues

Now is the Time to Buy

2020 has been a great year for both buying a home or refinancing your current real estate. If you have been thinking about buying a home, but you need to know how much you can afford to spend on one, let Team Lasson help! Visit our website, fill out an application, and we can get a preapproval ready for you. This will give you a good idea about how much you can afford to spend on a home. We look forward to assisting you through this exciting process and can’t wait to help you get the keys to your new vacation home through our mortgage services at Lake of the Ozarks.

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Senior Loan Officer
NMLS #: 493712

4655 B Osage Beach Parkway
Osage Beach, MO 65065

Direct: (573) 746-7211

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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