The True Cost of Buying A House
You Will Need More Than A Deposit
Ready to be a homeowner? Buying a house is a big financial commitment. It’s not just a deposit you need to budget for, but there are other ongoing and upfront expenses that can catch you off guard. So here’s a full picture of the cost of buying a house:
The amount of money you will need to have available to finalize your home purchase relies on various variables, primarily the price you paid for the house and the kind of loan you have procured.
Down Payment and Earnest Money Deposit
You will be expected to submit an earnest money deposit that is typically 1-3% of the offer cost. When your offer is acknowledged, this deposit turns out to be a part of your initial installment.
Down payment requirements are estimated as a percentage of the purchase price and differ by loan program and lender. This can range somewhere between 3.5% to 20%. Putting less money down may mean you pay a higher interest rate while a hefty down payment will help you build up equity faster and you can obtain better loan terms which is why most home buyers aim for the 20% mark.
The average home inspection cost within a wide range from $300 to $500, according to the U.S. Department of Housing and Urban Development. The cost will also depend on the specific location, size, configuration, age, competency and experience of the inspector.
Closing costs are fees you need to pay at the closing of your real estate transaction. These can average around 2% of the purchase price but can go as high as 5%. It include real estate attorney fees, tax payments, title expenses, and mortgage processing fees, among others. These can vary by locality and the price of your home.
Are you planning to hire movers? Moving can be expensive. Costs can vary by region and by distance. At the lower end of the scale, you’ll be looking at an average minimum of $100 for day hire of a moving van on a weekday. At the opposite end of the pricing spectrum, for a full moving service interstate or overseas, you’ll be looking at anywhere near $3,500 or more. If you plan to hire movers to help you move from your old home to new, be sure you’ve budgeted accordingly.
When buying a home, it is always good to know what you’re getting into on the front end. If you are a first-time buyer looking around Bakersfield homes for sale, you will benefit taking independent advice from a trusted Bakersfield realtor before you buy.