These are the different expenses you can expect when buying a home.
What should you expect financially if you're looking to purchase your first home? Here at Homes from DeHart, we often conduct buyer webinars and seminars for clients. When they ask about the financial aspects, we explain that there are several factors to consider when purchasing a home. Today, I’m sharing what they are.
One of the key factors is the purchase price. We advise clients to discuss this with their lender to get a clear understanding of their monthly payments. It's essential to compare this with their current rent payments and recognize that the main difference between buying and renting is the down payment amount.
Currently, the minimum down payment can be as low as 0% for VA loans, 3.5% for FHA loans, and 5% for conventional loans. However, the best deals and interest rates are usually obtained with a down payment of 10% to 20% on conventional loans.
Apart from the down payment, there are additional costs to consider. A home inspection may range from $200 for a basic walk-and-talk inspection to as much as $10,000 for more extensive inspections. The appraisal cost typically falls between $600 to $800, depending on the property's size. In some cases, you may need to pay for two appraisals, depending on the property's purchase price. Lastly, closing costs can vary but are generally around 2% to 3% of the sales price.
"Apart from the down payment, there are additional costs to consider."
Adding up the down payment, inspection, appraisal, and closing costs will give you the total amount required to buy a home. If you have enough saved up to cover these costs and plan to live in the property for at least five years, it might be a good idea to consider buying a property in the area.
If you have any questions about your financial obligations when buying a home or need help with your real estate goals, feel free to give us a call or send an email. I’m happy to help.