What are the real costs of buying a home?

One of the questions we get frequently is "How much money do I really need to purchase a home"? It may not be what you think. Each loan type changes the number, the lender you choose changes the number, and even the location of the home changes the number. There is not a defined answer that fits all situations.

Most think of the down payment for the home. USDA and VA loans allow for a zero down payment if you qualify for the loan. FHA loans are typically 3.5% down; while conventional programs have various percentages but typically it is 5% to 20% down. But that is not the end of the funding to purchase a home.

Closing costs are often forgotten. Typically, we tell buyers that closing costs will be from 4 to 8% of the cost of the home. (Yes sometimes closing costs can be more than your down payment!) Here is a list of some of the typical closing costs that most buyers will incur.

Typical closing costs for a buyer are:

• Inspection (paid prior to closing)
• Appraisal fee
• Survey
• Flood certification fee
• Origination fee to lender
• Discount points to lender
• PMI or Mortgage insurance (if you’re putting less than 20% down)
• Title search
• Title insurance
• Recording fee
• Transfer fee
• Doc stamps
• Intangible tax
• Prepaid interest
• Prorated Property tax
• Homeowners’ insurance
• Homeowners’ Association transfer fee (if applicable)

Again, these are the typical fees and may vary depending upon the type of loan you are obtaining, the lender you are using, the amount you are putting down, and the location of the property.

With new home construction, many times builders will have incentives to use the in house lender and will contribute a percentage towards your closing costs. Many ask about seller concessions being negotiated with the sellers of resale to contribute to paying some or all of the costs to the buyers. In today's market this is becoming more difficult to get seller's to agree to.

There are down payment assistance programs and bond programs that are sometimes available as well to assist with both closing and down payment. There are many aspects to these programs that a financing expert that works with these programs can explain. Credit, debt to income, and income are all apart of a buyer's ability to be eligible for these programs.

We work with multiple financing experts that can discuss these particular programs in detail. It is important to understand the full costs of home buying as you prepare to embark on this real estate journey.

East Pasco Living Team

We are a collaborative team with a vision to put our years of experience working and living in East Pasco to work for you! We strive to build long-term relationships and give you the individualized attention you deserve. Let us put our combined decades of experience to work for you. 

Carla Goddard | East Pasco Living Team Lead

Graduate, REALTOR® Institute | Residential Specialist | BHHS-Certified New Home Specialist | Certified National Home Specialist – Residential Construction Certified (CNHS-RCC) | NHCB Certified New Homes Co-Broker |BHHS-Certified eCertified® Specialist | BHHS-Certified rCertifiedSM Referral and Relocation Specialist | Tampa Bay Builder Services Manager

Berkshire Hathaway Home Services

📧email: carla@eastpascoliving.com

📲text/call 813.716.4498