Hello World! Welcome Friends! Buying a home is one of the most exciting events you have in life. You may have had dreams about buying your first home, and now you’re ready to make it a reality. There were more than 1.6 million first time homebuyers in 2019. If you’re looking to join them this year, you’ll be in for a surprise. There are more fees and costs involved in buying a home than just the purchase price. These costs can add up to thousands more than you were expecting to pay.
What are the costs of buying a home? Read on to find out.
1. The Down Payment
First-time buyers know that they need to have a down payment for a home. How much do you really need? It depends on a few factors. The first is your credit score. That will largely determine your ability to get approved for a home loan. If you have bad credit, you’re going to need more money for the down payment. That will show banks that you’re willing to assume more risk in buying a home, rather than having the bank take on so much. First-time buyers may qualify for an FHA home loan, which would require a lower down payment of 5%. Regardless of your circumstances, you will need to have a down payment saved up for your home loan.
2. Inspection Fees
When you put an offer on a home, and the seller accepts the offer, the transaction moves through the closing process. The home needs to be inspected to make sure there aren’t any structural issues or other major issues that could impact the deal. For example, a home inspection could reveal that there are major repairs that need to be made. That will make you think about how much to offer on a house, and the mortgage lender may not approve the loan. It’s the buyer’s responsibility to pay for the inspection, which is usually several hundred dollars.
3. Closing Costs
There are other costs that are incurred before and at the closing of the sale. The home goes through an appraisal, there’s a title search, and you have to pay to have the home insured. The closing costs will vary by location and the sales price of the home. Check with your lender and your real estate agent.
4. Cash Reserves
Banks feel more comfortable approving home loans to people who have cash reserves. As a new homeowner, you’re going to need cash reserves for maintenance, appliance purchases, and projects to make the home truly yours.
The Total Costs of Buying a Home
Buying a home is one of the most exciting things you can do in your life. You will also remember the feeling of closing on your first home. That feeling should be exciting, but it could turn to fear if you don’t know the costs of buying a home. You need to have money for the down payment, closing costs, and for the inspection. All of these costs add up, so be prepared by saving money now.
Ready for more home tips? Head over to the Decorating section of this site to see what you can do with your new home.
Click the links below for any posts you have missed:
How to Find the Best Basement Waterproofing Company
How your Crawl Space can Affect Quality of Life
One Room Challenge: Teen Bedroom – Week Three
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Toodles,
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