If you’re planning to buy a home, knowing what to budget for and how to save may sound intimidating – but it doesn’t have to be.
Here are just a few things experts say you should be thinking about.
1. Down Payment
Saving for your down payment is likely top of mind as you set out to buy a home. But do you know how much you’ll need? While every buyer’s situation is different, there’s a common misconception that putting 20% of the purchase price down is required.
To understand your options, partner with trusted real estate professionals to go over the various loan types, down payment assistance programs, and what each one requires.
2. Closing Costs
Bankrate explains: “Closing costs are the fees you pay when finalizing a real estate transaction, whether you’re refinancing a mortgage or buying a new home. These costs can amount to 2 to 5 percent of the mortgage so it’s important to be financially prepared for this expense.”
3. Earnest Money Deposit
Realtor.com describes how it works as part of your sale: “It tells the real estate seller you’re in earnest as a buyer . . . Assuming that all goes well and the buyer’s good-faith offer is accepted by the seller, the earnest money funds go toward the down payment and closing costs. In effect, earnest money is just paying more of the down payment and closing costs upfront.”
It’s important to work with a real estate advisor to understand what’s best for your situation and any specific requirements in your local area.
When buying a home, being informed about what to save for is key. DM me so you’ll have an expert on your side to answer any questions you have along the way.
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