Andrew Arroyo Real Estate

We have gathered the following information to assist our buyers with our three most frequently asked questions.

Question # 1 = When will I be required to have liquid cash during my transaction?

1. Deposit (when you locate the property and make an offer)
2. Inspections (once you’re in escrow which is usually 30-45 days)
3. Final settlement (five days before the close of escrow)

Question # 2 = How much will my monthly payments be?

With all of the various loan products on the market today, you need answers to exactly what will be showing up in your mailbox on the first of every month. We are happy to provide our loan expertise with you to find a loan program that meets your needs. The loan programs we recommend do not have pre-payment penalties or adjustable rates.

There are three items that will determine your eligibility for a loan: credit score, size of down payment, and supporting financial documents. Your credit score is by far the most important. The size of your down payment is also very important. The smaller the down payment, the more scrutiny a buyer will receive from an underwriter reviewing the file prior to funding a loan. A lender may ask for tax returns, bank statements, and several supporting documents depending on your relationship with the lender. Please contact us directly to go over the various loan programs. Together we will determine the best payment plan for your needs.

Question # 3 = How much liquid cash is this going to cost me?

Click on the link below that corresponds with the price range you are considering to purchase a home. These estimates will assist you in learning approximately how much liquid cash you will need to purchase a home.

$ 100,000	$ 1,000,000	$ 3,500,000	$20,000,000 +
$ 250,000	$ 1,500,000	$ 5,000,000
$ 500,000	$ 2,000,000	$10,000,000
$ 618,650 (FHA limit)	$ 2,500,000	$15,000,000

$100,000

How much total liquid cash do I need to purchase a property valued at $100,000?

The absolute minimum is $4,150. This means that you will need to obtain FHA financing with 3.5% down. If you wish to leverage the purchase with a conventional loan, rather than FHA, you may be able to find financing with 5% down. Anything less than 5% down, other than FHA, will usually include an unfavorable interest rate which is not recommended. Below are the itemized costs when purchasing a home in San Diego for $100,000.

Minimum Amount of Liquid Cash= $4,150

Allocation of costs:
$3,500 = down payment
$2,000 = deposit (which will go towards the down payment or closing costs)
$650 = inspections (home inspection & appraisal)
$0 = additional closing costs (seller will be asked to pay for buyer’s closing costs)

Ideal Amount of Liquid Cash= $29,650

Allocation of costs:
$20,000 = down payment (20% down which ensures the best interest rate)
$650 = inspections (home inspection & appraisal)
$5,000 = closing costs (buyer will pay for their own closing costs)
$4,000 = upgrades (including furnishings)

* Any amount of liquid cash from $4,150 - $30,000 is suitable for purchasing a home or condominium for $100,000.

** If you plan to sell your current home and utilize the proceeds to purchase another home, you will still need the liquid cash for the deposit and inspections. However, if the homes close concurrently, you will not need additional liquid cash as long as the proceeds from your current home sale are sufficient to satisfy the down payment on the home you purchase.

$250,000

How much total liquid cash do I need to purchase a property valued at $250,000?

The absolute minimum is $9,400. This means that you will need to obtain FHA financing with 3.5% down. If you wish to leverage the purchase with a conventional loan, rather than FHA, you may be able to find financing with 5% down. Anything less than 5% down, other than FHA, will usually include an unfavorable interest rate which is not recommended. Below are the itemized costs when purchasing a home in San Diego for $250,000.

Minimum Amount of Liquid Cash= $9,400

Allocation of costs:
$8,750 = down payment
$5,000 = deposit (which will go towards the down payment or closing costs)
$650 = inspections (home inspection & appraisal)
$0 = additional closing costs (seller will be asked to pay for buyer’s closing costs)

Ideal Amount of Liquid Cash= $64,650

Allocation of costs:
$50,000 = down payment (20% down which ensures the best interest rate)
$650 = inspections (home inspection & appraisal)
$5,000 = closing costs (buyer will pay for their own closing costs)
$9,000 = upgrades (including furnishings)

* Any amount of liquid cash from $9,400-$64,650 is suitable for purchasing a home or condominium for $250,000.

$500,000

How much total liquid cash do I need to purchase a property valued at $500,000?

The absolute minimum is $21,650. This means that you will need to obtain FHA financing with 3.5% down. If you wish to leverage the purchase with a conventional loan, rather than FHA, you may be able to find financing with 5% down. Anything less than 5% down, other than FHA, will usually include an unfavorable interest rate which is not recommended. Below are the itemized costs when purchasing a home in San Diego for $500,000.

Minimum Amount of Liquid Cash= $21,650

Allocation of costs:
$17,500 = down payment
$10,000 = deposit (which will go towards the down payment or closing costs)
$650 = inspections (home inspection & appraisal)
$1500 = additional closing costs (seller will be asked to pay for the majority of the buyer’s closing costs)

Ideal Amount of Liquid Cash= $118,650

Allocation of costs:
$100,000 = down payment (20% down which ensures the best interest rate)
$650 = inspections (home inspection & appraisal)
$6,000 = closing costs (buyer will pay for their own closing costs)
$12,000 = upgrades (including furnishings)

* Any amount of liquid cash from $21,650- $118,650 is suitable for purchasing a home or condominium for $500,000.

$618,650

How much total liquid cash do I need to purchase a property valued at $618,650?

The absolute minimum is $24,800. This means that you will need to obtain FHA financing with 3.5% down. The FHA loan limit is $597,000. This means that you may purchase a home approximately up to $618,650 in order to qualify for an FHA loan. If you wish to leverage the purchase with a conventional loan, rather than FHA, you may be able to find financing with 5% down. Anything less than 5% down, other than FHA, will usually include an unfavorable interest rate which is not recommended. Below are the itemized costs when purchasing a home in San Diego for $618,650.

Minimum Amount of Liquid Cash= $24,800

Allocation of costs:
$21,650 = down payment
$20,000 = deposit (which will go towards the down payment or closing costs)
$650 = inspections (home inspection & appraisal)
$2500 = additional closing costs (seller will be asked to pay for the majority of the buyer’s closing costs)

Ideal Amount of Liquid Cash= $149,400

Allocation of costs:
$144,000 = down payment (20% down which ensures the best interest rate)
$650 = inspections (home inspection & appraisal)
$7,000 = closing costs (buyer will pay for their own closing costs)
$18,000 = upgrades (including furnishings)

* Any amount of liquid cash from $24,800 - $149,400 is suitable for purchasing a home or condominium for $618,650.

$1,000,000

How much total liquid cash do I need to purchase a property valued at $1,000,000?

The minimum is $239,500. This would require that you acquire 80% financing with a down payment of 20% ($200,000). If you wish to leverage the purchase, you may be able to find financing with 10-15% down. Anything less than 20% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $239,500

Allocation of costs:
$200,000 = down payment (20% down which ensures a favorable interest rate)
$20,000 = deposit (which will go towards the down payment or closing costs)
$2,000 = inspections (home inspection & appraisal)
$10,000 = upgrades (including furnishings)
$7,500 = closing costs

Ideal Amount of Liquid Cash= $389,500

Allocation of costs:
$350,000 = down payment (35% down which ensures the best interest rate)
$2,000 = inspections (home inspection & appraisal)
$30,000 = upgrades (including furnishings)
$7,500 = closing costs

* Any amount of liquid cash from $239,500 - $389,500 is suitable for purchasing a home or condominium for $1,000,000.

$1,500,000

How much total liquid cash do I need to purchase a property valued at $1,500,000?

The minimum is $397,500. This would require that you acquire 80% financing with a down payment of 20% ($300,000). If you wish to leverage the purchase, you may be able to find financing with 10-15% down. Anything less than 20% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $397,500

Allocation of costs:
$300,000 = down payment (20% down which ensures a favorable interest rate)
$30,000 = deposit (which will go towards the down payment or closing costs)
$3,000 = inspections (home inspection & appraisal)
$20,000 = upgrades (including furnishings)
$8,500 = closing costs

Ideal Amount of Liquid Cash= $662,500

Allocation of costs:
$600,000 = down payment (40% down which ensures the best interest rate)
$4,000 = inspections (home inspection & appraisal)
$50,000 = upgrades (including furnishings)
$8,500 = closing costs

* Any amount of liquid cash from $397,500 - $662,500 is suitable for purchasing a home or condominium for $1,500,000.

$2,000,000

How much total liquid cash do I need to purchase a property valued at $2,000,000?

The minimum is $980,000. This would require that you acquire 65% financing with a down payment of 35% ($700,000). If you wish to leverage the purchase, you may be able to find financing with 20-25% down. Anything less than 35% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $980,000

Allocation of costs:
$700,000 = down payment (35% down which ensures a favorable interest rate)
$40,000 = deposit (which will go towards the down payment or closing costs)
$5,000 = inspections (multiple home inspections)
$125,000 = upgrades (including furnishings)
$10,000 = closing costs

Ideal Amount of Liquid Cash= $1,465,000

Allocation of costs:
$1,000,000 = down payment (50% down which ensures the best interest rate)
$5,000 = inspections (multiple home inspections)
$450,000 = upgrades (including furnishings)
$10,000 = closing costs

* Any amount of liquid cash from $980,000 - $1,465,000 is suitable for purchasing a home or condominium for $2,000,000.

$2,500,000

How much total liquid cash do I need to purchase a property valued at $2,500,000?

The minimum is $1,147,000. This would require that you acquire 65% financing with a down payment of 35% ($875,000). If you wish to leverage the purchase, you may be able to find financing with 20-25% down. Anything less than 35% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $1,147,000

Allocation of costs:
$875,000 = down payment (35% down which ensures a favorable interest rate)
$50,000 = deposit (which will go towards the down payment or closing costs)
$7,000 = inspections (multiple home inspections)
$250,000 = upgrades (including furnishings)
$15,000 = closing costs

Ideal Amount of Liquid Cash= $1,822,000

Allocation of costs:
$1,250, 000 = down payment (50% down which ensures the best interest rate)
$7,000 = inspections (multiple home inspections)
$550,000 = upgrades (including furnishings)
$15,000 = closing costs

* Any amount of liquid cash from $1,147,000 - $1,822,000 is suitable for purchasing a home or condominium for $2,500,000.

$3,500,000

How much total liquid cash do I need to purchase a property valued at $3,500,000?

The minimum is $1,147,000. This would require that you acquire 65% financing with a down payment of 35% ($1,050,000). If you wish to leverage the purchase, you may be able to find financing with 20-25% down. Anything less than 35% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $1,427,000

Allocation of costs:
$1,050,000 = down payment (35% down which ensures a favorable interest rate)
$70,000 = deposit (which will go towards the down payment or closing costs)
$7,000 = inspections (multiple home inspections)
$350,000 = upgrades (including furnishings)
$20,000 = closing costs

Ideal Amount of Liquid Cash= $2,627,000

Allocation of costs:
$1,750, 000 = down payment (50% down which ensures the best interest rate)
$7,000 = inspections (multiple home inspections)
$850,000 = upgrades (including furnishings)
$20,000 = closing costs

* Any amount of liquid cash from $1,427,000 - $2,627,000 is suitable for purchasing a home or condominium for $3,500,000.

$5,000,000

How much total liquid cash do I need to purchase a property valued at $5,000,000?

The minimum is $3,580,000. This would require that you acquire 50% financing with a down payment of 50% ($2,500,000). If you wish to leverage the purchase, you may be able to find financing with 35-40% down. Anything less than 50% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $3,130,000

Allocation of costs:
$2,500,000 = down payment (50% down which ensures a favorable interest rate)
$100,000 = deposit (which will go towards the down payment or closing costs)
$10,000 = inspections (multiple home inspections)
$600,000 = upgrades (including art & furnishings)
$20,000 = closing costs

Ideal Amount of Liquid Cash= $6,545,000

Allocation of costs:
$5,000,000 = cost of home
$25,000 = inspections (multiple home inspections)
$1,500,000 = upgrades (including art & furnishings)
$20,000 = closing costs

* Any amount of liquid cash from $3,580,000 - $6,545,000 is suitable for purchasing an estate for $5,000,000.

$10,000,000

How much total liquid cash do I need to purchase a property valued at $10,000,000?

The minimum is $6,190,000. This would require that you acquire 50% financing with a down payment of 50% ($5,000,000). If you wish to leverage the purchase, you may be able to find financing with 35-40% down. Anything less than 50% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $6,190,000

Allocation of costs:
$5,000,000 = down payment (50% down which ensures a favorable interest rate)
$100,000 = deposit (which will go towards the down payment or closing costs)
$50,000 = inspections (multiple home inspections)
$1,000,000 = upgrades (including art & furnishings)
$40,000 = closing costs

Ideal Amount of Liquid Cash= $13,590,000

Allocation of costs:
$10,000,000 = cost of home
$50,000 = inspections (multiple home inspections)
$3,500,000 = upgrades (including art & furnishings)
$40,000 = closing costs

* Any amount of liquid cash from $6,190,000 - $13,590,000 is suitable for purchasing an estate for $10,000,000.

$15,000,000

How much total liquid cash do I need to purchase a property valued at $15,000,000?

The minimum is $9,760,000. This would require that you acquire 50% financing with a down payment of 50% ($7,500,000). If you wish to leverage the purchase, you may be able to find financing with 35-40% down. Anything less than 50% down would usually incur an unfavorable interest rate which is not recommended due to the size of the loan.

Minimum Amount of Liquid Cash= $9,760,000

Allocation of costs:
$7,500,000 = down payment (50% down which ensures a favorable interest rate)
$150,000 = deposit (which will go towards the down payment or closing costs)
$50,000 = inspections (multiple home inspections)
$2,000,000 = upgrades (including art & furnishings)
$60,000 = closing costs

Ideal Amount of Liquid Cash= $19,110,000

Allocation of costs:
$15,000,000 = cost of home
$50,000 = inspections (multiple home inspections)
$4,000,000 = upgrades (including art & furnishings)
$60,000 = closing costs

* Any amount of liquid cash from $9,760,000 - $19,110,000 is suitable for purchasing an estate for $15,000,000.

$20,000,000 +

How much total liquid cash do I need to purchase a home above $20,000,000?

Residential properties in excess of $20,000,000 should be purchased with cash. The property taxes alone will be above $25,000 per month. Furthermore, maintenance on estates of this caliber will require full time staff as protecting the capital investment is essential. Utilities, staff, and landscape can quickly add up to another $25,000-$50,000 per month. A minimum of $2,500,000 should be allocated to improvements, art, and furnishings.