The 5 Most Common Fees Associated With Purchasing a Home
The 5 Most Common Fees Associated With Purchasing a Home Aside from the list price, there are five other fees commonly associated with buying a home that you need to be aware of. Selling in the greater Houston area? Get a market analysis report Purchasing in the greater Houston area? Get full MLS access When buying a home, here are the five most common fees, outside of the purchase price of the home itself, that you can expect to pay: 1. Down payment. Typically, down payment expenses make up anywhere from 3% to 5% of the overall purchase price. Some buyers choose to make a down payment of 20% or more, and there are benefits to putting that much down, but there are also several down payment assistance programs that allow you to buy a home with 0% down if you meet the loan requirements. The best way to find out how much money you’ll need to cover your down payment is by talking to your lender. 2. Closing costs. This is usually the second-largest out-of-pocket expense homebuyers make, and it’s often confused with the down payment. Most of the fees involved with your closing costs are associated with the preparation of your mortgage. These include attorney fees, title insurance fees, taxes, lender costs, and homeowners insurance. Some of these costs, such as the recording and transfer taxes charged by your state and local government, are non-negotiable. Others, though, you may be able to negotiate over with the seller. The amount you’ll pay overall depends on the size of your loan and what taxes you pay in your area, but they generally constitute 3% to 6% of the purchase price. The best way to find out how much money you’ll need to cover your down payment is by talking to your lender. 3. Earnest money. This isn’t necessarily a fee, but it is something you need to be aware of because you’ll need earnest money up front to move forward with the purchase of the home. Earnest money is basically your proof to the seller that you’re serious about buying their home. There needs to be earnest money involved to protect the seller’s interests while they take their house off the market and give you time to do your inspections. In the Houston area, the earnest money amount is usually 1% of the purchase price. This amount is then credited back to you at closing. 4. Appraisal fee. An appraisal is an educated guess as to how much the property is worth. No credible financial institution will lend you money to purchase a home without first getting an appraisal done on that home. Appraisals usually cost $500. 5. Home inspection fee. This is technically an optional fee, but we always recommend getting a home inspection when buying a home. An inspection will determine whether there are any problems with the home that need to be addressed before moving forward with the purchase. An inspector will look at the mechanical functions of the house to make sure everything is in working order. There are also specialized inspectors who perform a specific type of inspection, such as a termite inspection. If you have any more questions about home purchasing fees or you have any other real estate needs I can take care of, don’t hesitate to reach out to me. I’d be glad to help you. Written by Ruby Miranda on December 11, 2018. Posted in Buyer Tips, First Time Home BuyersTags: Buy Your Home, Buyer Tips, Financing A Home, Ruby Miranda Trackback from your site. Leave a Reply
Buying Real Estate? – Watch These 5 Steps! LOL
Buying Real Estate? – Watch These 5 Steps! LOL Step 1. Knowing When You’re Ready Buying a home is so grown-up and impressive, but there are a few things you should think about before you start telling everyone how grown up and impressive you are. Step 2. Mortgage Lending 101 Unless you have a boatload of cash under your mattress, buying a home usually costs more money than you currently have. First, you’ll need a competitively-priced loan. Step 3. The Home Search You’re really doing it! You know what you can afford and you’ve got your pre-approval letter. But before you buy the home of your dreams, you’ve gotta find it first. Step 4. Making The Offer Here you are, ready to make an offer on your first home! And since you’re about to part with an insane amount of money, it’s time to get close to your REALTOR®. Step 5. Closing the Sale – YES There is nothing more awesome than taking ownership of your new dream home. But before you do that, you better loosen up your writing hand. Did someone say paperwork? Written by Ruby Miranda on September 29, 2018. Posted in Buy A Home, Buyer Tips, First Time Home Buyers, Home Loan Process, Raving Fans, Real Estate Knowledge Video Series, Testimonials / ReviewsTags: Buy Your Home, Buyer Tips, Financing A Home, First Time Buyer, Home Appraisals, Home Inspections, Home Loan Process, Real Estate Knowledge Video Series Trackback from your site. Leave a Reply
How to Figure Out How Much House You Can Buy
How to Figure Out How Much House You Can Buy If you’re looking to buy a home but are unsure of how much house you can afford, here are five steps you can use to figure it out. Looking to buy in the Greater Houston Area? Get a full MLS accessLooking to Sell in the Greater Houston Area? Get a free home market analysis One of the questions I get asked a lot as a Realtor is, “How much house can I buy?” In other words, how can you determine what your housing budget is when purchasing a house? There are five steps you must follow: Figure out your household’s income after taxes. What do you and other income earners who will be contributing to the household bills bring home each month after taxes? Look at your last paycheck stub, ask your HR department, or use an online paycheck calculator to calculate this amount. Make a list of your household’s recurring monthly expenses. This should include bills you pay every month and bills you only pay some months—like car insurance. If you don’t already have a way you’ve been tracking your budget, look at your checkbook, your bank statements, and your credit card statements to help figure out what you’ve been spending. Note which expenses are optional and which are necessary. Make a list of expenses that you will add to when you become a homeowner. Expenses you’ll have that you didn’t have as a renter include water, trash, and home maintenance. You’ll also pay property taxes and hazard insurance. If you’re moving further from your job, your transportation costs may increase as well. If you’re going to make a downpayment of less than 20%, you’ll have to factor in the monthly cost of private mortgage insurance (PMI). Remember, it’s best to estimate high when planning your budget just to be on the safe side. I can refer you to a local lender who can help you with these steps. Determine how much you will have left after expenses to spend on housing. A lender can help you determine your maximum monthly payment by calculating what they call a debt-to-income ratio. Basically, this is what gets paid into the home versus what gets paid out on a monthly basis. Once you’ve determined your household budget, you should have an idea of what you’re comfortable paying on a monthly basis for a house. Don’t forget to leave room for emergencies, retirement, or whatever else you want to save for. In other words, count savings as a non-negotiable expense. Figure out how much house you can buy. The No. 1 way to truly know what your budget will allow for on a house note is to sit with a mortgage lender and have them look at your credit score and finances. A great lender will be able to help you figure out what your ‘no-more-than’ amount should be, which will determine which price points you should shop in. As a Realtor, I can help guide you to a local lender who will be an expert in these areas. If you have any other questions about this topic or you have a topic in mind you would like to see me discuss in a future video, please don’t hesitate to give me a call. I’d love to hear from you! Contact Us Written by Ruby Miranda on September 23, 2018. Posted in Buy A Home, Buyer Tips, Financing A Home, First Time Home Buyers, Home Loan ProcessTags: Buy Your Home, Buyer Tips, Clifton Saunders, Financing A Home, First Time Buyer, Ruby Miranda Trackback from your site. Leave a Reply
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