Buyers need to budget when buying a home?

Tuesday Apr 05th, 2022

Share

When it comes to buying a home, it can feel a bit intimidating to know how much you need to save and where to find that information. But you should know, you’re not expected to have all the answers yourself. There are many trusted professionals who can help you understand your finances and what you’ll need to budget for throughout the process.

To get you started, here are a few things experts say you should plan for along the way.

1. Down Payment

As you set your savings goal for your purchase, your down payment, is likely already top of mind. And, like many other people, you may believe you need to set aside 20% of the home’s purchase price for that down payment – but that’s not always the case.

The good news is, you may be able to put less down in some situations and speaking to our mortgage brokers will help you understand your options.

2. Earnest Money Deposit

Another item you may want to plan for is an earnest money deposit. While it isn’t required, it’s common in today’s competitive market because it can help your offer stand out in a bidding war.

So, what is it? It’s money you pay as a show of good faith when you make an offer on a house. This deposit works like a credit. You’re using some of the money you already saved for your purchase to show the seller you’re committed and serious about their house. It’s not an added expense, it’s just paying some of that up front. 

In other words, an earnest money deposit could be the very first check you’ll write toward your purchase. Work with a real estate advisor to understand any requirements in your local area and what they’ve recommended for other buyers in your market. They’ll help you determine if it’s something that could be a useful option for you.

3. Closing Costs

The next thing to plan for is your closing costs.

Basically, your closing costs cover the fees for various people and services involved in your transaction, like land transfer tax etc. Closing cost which make up 2%-5% of the homes purchase price are a major expense. Buyers need to budget for these added costs ahead of time.

Bottom Line

Knowing what to budget for in the home buying process is essential. To make sure you understand these and any other expenses that may come up, partner with a real estate advisor for expertise on what to expect when you buy a home.

Call JoAnn VISAretis TODAY & lets get started on your Home Ownership!

 


Post a comment