Upfront Costs When Buying a Home
Are you curious how much out of pocket it would cost for you to invest in your next home?
Typically the largest upfront cost when investing in your very own home is the down payment.
The most common down payment options are between 3% and 5% depending on the type of loan you’re doing, and there are even some options available where you can put 0 down.
Mortgages are like your fingerprints, everyone is different, and you have options to put as little as you’re comfortable with down, or as much as you want down. It really all depends on your personal financial situation.
The first expense is the initial deposit, which gets paid after your offer is accepted by the seller. We see that range anywhere from $1,000, all the way up to the total amount of your down payment.
One of the next out-of-pocket expenses you’ll face in your purchase is the cost of the home inspection. Depending on the types of inspections that you’ll need, this could range anywhere from under $500 to over $1,000.
Your typical home inspection is usually in the range of $500, but if you have a septic system and a well that needs inspecting, those items could push the cost upwards of $1,000
The next out-of-pocket expense is going to be the appraisal. The appraisal is ordered by your lender and is done to ensure that the value appraises for at least the price you’re purchasing the home for. This fee can range anywhere from around $400 to about $600
The final out-of-pocket cost is going to be the closing costs. These can range anywhere from $5,000 to $7,000 on most transactions, but if it’s a higher-end home, it might be even higher. If you’re worried about too many out-of-pocket costs upfront, we can always negotiate a credit from the seller to help with closing costs, so you keep that money in your pocket.
If you have questions about the buying process or want any further information at all, give us a call. We’re always here to help.