BUDGETING TO BUY PART 2

What does it Cost to Buy a Home 

Once your contract has been accepted, here are some costs that you will have to pay between now and closing.  Some of these costs must be paid before closing,  others are paid at closing,  and some may be financed at closing.

Costs that must be paid up front before closing

Credit Report: Approximately $65 paid at Loan application.   Good only for 60 Days.  This covers the lenders cost of running your credit report.

Appraisal Fee:  Approximately $300  – 400 paid at Loan application.  This covers the cost of a

appraiser to inspect the home and determine its value.  This also insures that the Lender does not loan more that the home is worth and that you do not buy a home for more than its worth.

Earnest Money:  Approximately  $500  – $1000 (determined by the contract) paid at Contract Offer.  This money will be credited back to you at closing.  It is considered a good-faith deposit signifying your

serious intent to purchase the property and give the seller an incentive not to see the home to someone else while you are getting g your financing arranged.

Inspection:  Approximately  $250  – $400 paid at Inspection. This is only required if you hire a

professional home inspector to inspect the property for you. Unless you are highly educated or experienced about all aspects of home construction, it is highly recommended that a Professional Inspector is hired.

Hazard Insurance:  Approximately .3% of Purchase Price ($300 per $100,000).  A one year policy

purchased up front is usually required by the Lender  before closing.  This cost usually can be rolled into closing costs and financed.

At Closing

Closing Costs:  These vary widely by Lender, Loan Amount, Credit Score of the Borrower, Type of Loan, time of the year, and many other factors.  Typical costs for estimation purposes are as follows:

Up to $100,000 Loan 3-4%

$100,000  –  $150,000 2.5%

$150,000 + 2.2%

Down payment:  Determined by you and your Lender.  This can be anything between 0 and 99% of the loan.  Each loan program has its own requirements.  The more down payment you make, the better your loan terms.