Here are some common home-buying fees you need to know when purchasing. 

Are you looking to purchase a home? If so, you probably know you’ll have to make a down payment on your mortgage, but are you aware of the other buyer fees? Today we want to discuss some common buyer expenses so that you don’t get caught off guard when making a home purchase.  

First, let’s talk about the biggest expense: your down payment. Depending on the type of loan you apply for, there will be a different minimum requirement for your down payment. If you’re a veteran, you can apply for a VA loan at 0% down. If you’re using an FHA loan, you can apply for a loan at 3% down. This means if you purchase a $300,000 house, your down payment would only be $9,000. If you need to get in touch with a local lender to discuss your down payment options, please reach out to us; we’d love to put you in touch with someone great. 

Another fee you should be aware of is the earnest money deposit. Good-Faith deposit that is required at the time of an accepted offer and is held with the seller's real estate office until the day of closing. Typically, the earnest money deposit is around 1% of the total sales price; however, this money can be used for your down payment, so it won’t affect your bottom line. 

“You can purchase a home with as little as 3% down.”

If you request a home inspection, you should expect to pay the inspector anywhere from $300 to $600. There are other inspections you may want, including radon, fireplace, and sewer inspections. Each type of inspection varies in cost based on the size of the house. While most buyers have an inspection, some skip the process to make their offers more attractive to sellers. 

If you skip your inspection, you may want to consider a home warranty. This would include coverage on things such as furnaces, air conditioners, water heaters, appliances, plumbing, and more. A good warranty will cost about $600 and will be billed at closing. 

Depending on the type of loan you receive, you will be required to purchase homeowners insurance prior to closing. You can pay it annually or add it to your monthly mortgage payment. If you need a recommendation for a good policy, please contact us. 

Finally, you’ll have to pay closing costs. These include things like your lending fees, appraisal fees, prepaid homeowners insurance and property taxes, recording fees, processing fees, and others. Sometimes these fees can be rolled into your loan, or your seller might help you pay them. Typically, closing costs are about 3% of your total purchase price, which would be $9,000 for a $300,000 home. 

If you have questions about closing costs or you want to create a plan to pay them, please call or email us. We’d love to help!