13 Jan Upfront Costs Every Homebuyer Should Know
When you are buying a home, knowledge is power! Once the seller accepts your offer, be prepare to buy for the following expenses out-of-pocket:
A deposit of good faith tells the seller that you are a committed buyer. The amount is typically 1%-3% of the total purchase price, but it’s negotiable. The earnest money is applied toward the purchase price.
A home inspection is not required, but it’s highly recommend. The cost ranges from $350 – $525, depending on the total square footage of the home.
Your lender will require you to pay for the appraisal, which is an estimate of the home’s value. Fees can vary, but you should expect to pay between $425 – $525.
The down payment is the amount you will pay to meet the requirements of your loan. For example, a FHA loan requires the borrower to put down 3.5% of the purchase price. Make sure to ask your lender about the down payment amount.
The closing costs consist of the underwriting and origination fees, credit report fees, title insurance, property taxes, and recording fees. Depending on the purchase price, you may pay between $3,500 – $15,000. Lucky for you, your agent can negotiate terms in which the seller can pay for some of your closing costs, putting money back in your pocket!
If you’re thinking of purchasing soon, start a savings plan now to cover these expenses. When you’re ready to buy, let’s chat!