February 8th, 2018
Now is the time to visit territory mostly unfamiliar to first-time homebuyers: the costs that go along with buying a home.
Prior to purchasing a home, you will need cash for what is called earnest money and down payment. It's quite possible that you may have been told that a 20% down payment is required to purchase a home, but that isnt entirely true. Loan programs exist that allow borrowing as high as 96.5% - or possibly 100% financing for individuals who qualify. Contact me to learn more.
When making a monthly mortgage payment, you will actually be paying 3 components simultaneously:
Principal -The actual dollar amount that you've borrowed. Interest - the cost involved in the borrowing of the funds for your property. Escrow - money that goes into a third party account designed to cover taxes and insurance for you. Learn more about escrow.
You will also need to pay closing costs when the home's ownership is transferred to you. Closing costs would be a one-time payment due at the time you close the loan.
Closing costs will vary slightly for everybody, but listed below are a few examples what may be included:
You may be able to negotiate with the seller to cover a portion or every one of your closing costs. In the event the seller is not willing to do so, leaving you unable to pay for these costs, rolling them into the loan is an option.
Don't forget: Your house will require routine maintenance and upkeep. You will also be faced with bills for electricity, water, internet, and additional utilities to pay out. There are alsomoving costs to contend with, be it hiring professionals or serving pizza and sodas to your friends, you will still be needing to set aside some money for that as well!
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