Thursday, January 29, 2015

Money, money, money

When it comes to buying a new house there are two big financial questions you have to ask yourself:

What can I afford to pay (and should I pay) per month?
How much money will I need as a down payment?
Well the first one was easy.  My wife and I had just started new jobs (same careers as before) and were now making good enough money to be able to afford a nice home.  Also, the reason we selected this subdivision because it was in our budgeted, monthly price range.

As to the down payment, I was fortunate to stumble on a government program designed for recent college graduates, the Ohio Housing Finance Agency's (OHFA) Grants for Grads program.

OHFA ( has many down payment assistance programs, but I will only talk about the Grants for Grads program.  Essentially, within 2 years of graduation, college students can receive 2.5% towards their down payment and up to 2% towards closing costs.  The 2.5% down payment assistance is tacked on as a interest-free 2nd mortgage that is removed after 5 years of living in the home.  The 2% closing cost assistance adds about 0.50% to the loan rate.

My Ohio Home's Website

As of this writing, the loan rate for the Grants for Grads program is 3.75% for an FHA loan.  Pretty nice.  So, in all actuality, all a potential buyer needs is 1% down (3.5% minus 2.5%) to buy a house.

We will be putting down more than 1%, but we still want to save some money for things we'll need once we move in like a Refrigerator, Washer/Dryer, Blinds, etc.

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