Here are a few costs you should plan for as you budget to buy a home.
You may need 20% of the home’s purchase price for a down payment or as little as 3.5% (or even 0%). To find out which option is best for you, partner with a lender who can review loan types and down payment assistance programs.
Earnest Money Deposit
This is an initial deposit towards your purchase, made when you submit an offer. Not required, but common in today’s highly competitive market. On average this is 1-2% of the home’s purchase price but we recommend you work with a realtor to determine how much you need.
Fees for the services and people involved in completing your transaction. This cost is typically 2-5% of the home’s purchase price and you will want to budget for this ahead of time. Your lender will provide a disclosure, which will list the fees associated with your mortgage.
Planning a budget will better prepare you for purchasing a home. To make sure you understand these and any other expenses that may come up, partner with a real estate agent for their expertise on what to expect along your home buying journey.