The costs of buying a home will vary depending on things like the price of the home, type of mortgage, and property taxes. Here’s a breakdown of the types of costs to expect:
- Ernest Money – When you make an offer on a home, you’ll need to come up with earnest money to show the seller that you’re serious about purchasing the home and can be around 1% to 2% of the purchase price.
- Down Payment – The size of your down payment varies by the purchase price and type of loan. Conventional loans usually require 20% of the purchase price as a down payment (to avoid paying PMI), whereas FHA loans would need 3.5% down, and VA loans require no down payment.
- Professional Fees – Beyond closing costs, you may also need to pay fees for realtors, inspectors, and attorneys who may be involved in the transaction.
- Closing Costs – Typically, the buyer’s closing costs include underwriting, appraisal fees, mortgage insurance, homeowner’s insurance, and property taxes.
- Moving Expenses – Be sure to factor in the costs associated with moving in.