Looking to buy in Southwest Ohio? Get a Full Home Search
Looking to sell in Southwest Ohio? Get a Free Home Price Evaluation
Looking to sell in Southwest Ohio? Get a Free Home Price Evaluation
Buyers often want to know how much money they need up front when buying a home. It's a great question, and we never want our buyers to be surprised anywhere in the buying process.
The first step in buying is the down payment, which includes an earnest money deposit. Earnest money is submitted at the time of the offer and is usually between $200 and $1,000 in our area. This usually becomes part of the down payment - which is a payment calculated as a percentage of the purchase price. This percentage varies by loan, program, and lender. Expect your average lender to ask for anywhere from 3.5% down for an FHA loan or 5% to 20% down for a conventional loan.
Then there is the appraisal, which your lender will require to be paid for up front; about $400 or $500. After that, there's the home inspection, which will cause you between $300 and $500 depending on the size and age of the property. You may also want special inspections done on the home, which of course will cost you more.
Next, you have closing costs. These include real estate attorney fees, title expenses, and mortgage processing fees, among others. Most lenders want to collect six months of taxes and 12 months of homeowner's insurance up front at the time of closing to be held in escrow. Your Realtor will likely negotiate that the seller assists the buyer with some or all of those closing costs.
So all in all, most experts recommend budgeting 2% to 5% of your total purchase price as a savings target. Make sure you get an experienced agent to walk you through the process.
We'd love to be that expert for you. If you have any questions or are interested in buying a home, please reach out to us today!
