How Much Money Do You Need to Buy a Home in Reston?

How Much Money Do You Need to Buy a Home in Reston?

One big advantage of house hunting in Reston is the wide variety of housing options available.  Homebuyers can choose from condos, townhomes, and single-family homes, as well as lakefront and golf course communities.

According to realtor.com, housing prices in Reston are as varied as its dwellings, with prices ranging from about $160K to $1.8M.  As a homebuyer, estimate all your potential costs in advance so you can be financially ready for this major purchase.  Here are some things to consider when determining how much money you need to buy a home in Reston.

How Much Can You Afford?

Your first step is to figure out how much you can afford to spend on a house. Knowing this will help you focus your house hunting efforts on properties within the right price range.

The Home Affordability Calculator on realtor.com lets you plug in your annual income, monthly debt, and down payment to give you an estimate of the home price you can afford along with an estimated monthly payment.  Nerdwallet.com also has a Home Affordability Calculator that factors your credit score into the equation. 

How Much Do You Need for a Down Payment?

Your down payment, the cash you pay upfront to buy a home, is deducted from the total amount of your mortgage. A higher down payment definitely has some advantages. Lenders like 20% down, which can help secure better mortgage interest rates and a lower monthly payment. However, since the down payment isn’t the only cash you have to come up with when buying a house, 20% may not be a realistic down payment amount for everyone.

You can opt for a lower down payment and, with some lenders, no down payment. The downside will be higher interest rates and additional fees, including mortgage insurance. You will need to crunch the numbers and then shop around to find lenders who can accommodate what works best for you.

Closing Costs

Closing costs are fees you pay when you buy a home. Closing costs cover a variety of areas including appraisals, attorney fees, home inspection fees, and payments to title companies. Homebuyers pay about 2 to 5 percent of their home’s purchase price in closing costs. Many closing costs are negotiable so see what, if any, concessions, the seller might make. You can also shop around for lenders who offer discounts on closing costs as incentives.

 Prepaid Expenses

Prepaid expenses are expense you’ll have to pay for regularly as a homeowner. When you close on a house, some of these expenses are paid upfront to fund your escrow accounts for things like property taxes and insurance.

Cost of Moving

When calculating how much money you need to buy a house, don’t forget the cost of physically moving. From purchasing boxes and packing supplies to hiring a moving company, the cost of moving adds up fast. Expect to pay about $2300 to $4300 when you hire a moving company. Trim costs by shopping around for the best deal, collecting free boxes, and moving some of your items yourself.