How Much Does Buying a House Really Cost?

How Much Does Buying a House Really Cost?

You have searched for what seems like forever for “the one.” No, not the love of your life unless that happens to be a house. So you found the house you have been looking for and it is within your budget…or is it? How much does buying a house really cost? Well, let’s start at the beginning. Your loan. How much of a down payment will you need? Some loans are as little as 3.5% or 5% down, but you may want to avoid mortgage insurance and, therefore, put at least 20% down. What interest rate are you getting? It not only will help determine your monthly payment but it will determine how much you pay over the entire life of the loan. Next, you will likely pay for inspections. Depending on what type of inspections you require, you may spend $200-$1200. Your real estate agent can help you decide which inspections you may need for the type of property and the area you are purchasing. Appraisal. If you get a loan, you will get an appraisal. These typically run about $450. Sometimes they are rolled into closing costs but it may be required to be paid upfront so make sure you find out before you commit. And, speaking of closing costs, there are many options. When a loan is involved, typically there are escrow charges. These are reserves for taxes and insurance and can be up to a year’s worth of payments. You will also pay the current taxes and insurance at the time of purchase. Your state may have other taxes that are required to be paid at time of purchase. Then you have the charges for the attorney, title company or closing agent that does all the behind the scenes work as well as performs the closing. You may also have real estate broker charges depending on who is paying commissions and if there are any administrative fees that are being charged. You will need title insurance. That is paid at closing and may be charged to you as the Buyer. You may also be purchasing a home warranty that is also charged at closing. You may have negotiated that the Seller will pay for all these items, therefore, saving you cash. You will want to be very clear as to what charges you are responsible for, how they will be paid, and when they are due. Lastly, make sure you know what forms of payment are accepted. You don’t want to be scrambling to get to the bank before they close because you didn’t know a personal check was not an acceptable form of payment. As you can see, that $200,000 house could end up...

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