THE COST TO PURCHASE A HOME
October 28, 2024 | Buying
If you’re wondering how much it will cost to buy a house, you’re not alone! Buying a home usually represents your single biggest investment. We like to provide this information upfront so that you can plan! Taking the time to understand the costs will help you make smart and informed decisions.
The two major costs to purchase your new home are:
1. Down Payment | 3-20% of the Purchase Price
2. Closing Costs | ~3.5% of Purchase Price, and can include: loan points, taxes, title insurance, legal fees, and a loan origination fee.
So, when can you expect to pay these costs? Good question!
When you find the home you love, you write an offer on it, and then once the offer is accepted by the seller, you are required to put down a deposit representing your interest in buying the home. This deposit is called the Earnest Money Deposit (EMD) and is typically 3-5% of the sales price of the home. This is not a fee! This deposit will get held by the settlement company and will get credited towards your Closing Costs on the day of settlement. The remainder of your Closing Costs + Down Payment will be due on the day of settlement.
Here is an example with a $500,000 purchase and a 20% down payment:
In addition to the larger expenses, there are also Out-of-Pocket Costs to consider during your home-buying process. These can include:
1. Loan Application
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Credit Report: $35
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Appraisal: $450
2. Home Inspection
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General: $450-800
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Radon: $170
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Termite: $50
3. Case-by-base
In some scenarios there may be additional expenses. They can include but are not limited to inspections for lead-based-paint, septic tank, well, or structural analysis of the home. This will depend on the age, location and condition of the home.
Interested in learning more? Click above to book a consultation and our team will walk you through the process!
