What are the costs that can be expected when purchasing a home? You have carefully been preparing for this day all your adult life. Buying your home is likely to be the biggest purchase you will make in your lifetime. In your preparation you have worked on making sure your credit is decent, your income is enough to buy the home of your choice and now you are ready to find your home.
You know there are costs involved with purchasing a home. What are they, and how much will you really need. Those are great questions. There are a couple different answers to those questions. Here is a list of the costs that you could be looking at and what it will cover.
• As you begin the process of purchasing a home, it is a good idea to talk to a buyer’s agent. The reason is that the seller has a person working for them to get the best price possible. It would be good to have someone working with your for your benefit. The cost of a buyer’s agent is covered in the sale of the home; therefore you do not pay any extra for the help.
A buyer’s agent will be able to show you homes, make sure the homes are in good condition, and finally help negotiate the final price. This will save you money in the long run.
• Fees are the next area that you will need to consider. This will include:
a. Appraiser fees
b. Attorney fees
c. Lender’s inspection fees
d. Loan origination fess
e. Underwriting fees
f. Document preparation fees
g. Messenger and delivery fees
h. Rate lock fees
i. Hazard insurance premiums
j. Prepaid interest mortgage insurance fees
k. Recording and filing fees
l. Inspection fees
Typically the closing costs and fees are in the amount of about 2%-78% of the final sale of the house. The seller of the home usually pays around 4%-7% of the closing costs.
The next thing you will want to consider is the down payment you want to make on the purchase of your house. It used to be that 20% was pretty standard. However now more than ever it is possible to get a home with no money down. There are a couple different loan options out there.
• Loans with the down payment of 20%
• Loans with no down
• Loans with a higher amount like 106% of the home value. This will cover closing costs.
Depending on the credit, job stability and income you have will be the determining factors that the lenders will consider for your loan. Also, if you do not use a down payment your interest rate and payments may be higher than what you had expected.
This is the time to be picky, the costs and loans for a home are something that can affect you for a very long time. Therefore take your time, do some research and make sure to ask plenty of questions.
A buyer’s agent will be happy to direct you to a few good lenders that you can talk to and find the best option for your financial circumstances.
When you consider the total cost you will pay when purchasing a home, it is going to be roughly 4%. So do the math. $8000 for a $200,000 home will be what you should plan on. For first time buyers and buyers that have decent credit, you can get loans to help cover this cost. However, in the end you will have to pay this amount back plus interest.
You have planned to purchase your home in the best of circumstances; it is a good idea to have at least a few thousand dollars available for the costs of purchasing a home. Finally do not forget the cost to move into your dream home.
Chuck Lunsford is the content for Tina Abraham, one of the best
realtors in Wilmington, NC specializing in selling homes in Wilmington, Greater Wilmington, Pender County and Brunswick County, some of the highest demand homes in the world. Visit us for
Wilmington, NC homes for sale or call (910) 790-7484 for more information on how Tina can help you sell your house or buy the home of your dreams.
