If you’re buying a home for the first time, or just haven’t done it in a while, you might be wondering what expenses to expect during the course of purchasing your next home. Here’s a quick summary based on when you’ll need to pay for these items.
Before Closing
Earnest Money
You’ll need to write a check for earnest money when you make an offer. Most often, it’s around 1% of the purchase price. This money is credited towards your down payment at closing.
Inspection
A typical home inspection will be around $400. If you want to do additional specific inspections (e.g. radon test or sewer scope) those will add to this number. You’ll need to pay for any inspections at the time of service.
Appraisal
Most lenders require the appraisal to be paid for it is ordered, shortly after you’re under contract. Plan on $600-800.
At Closing
Down Payment
Depending on your loan, you may do as little as 0% down or you may choose to put down 20% or more.
Closing Costs
$4-6k is fairly typical, but purchase price, loan type, and lender choice all impact this. Additionally, you’re sometimes able to negotiate for the seller to help with these costs. Since most closing costs are lender driven, make sure to ask your lender for an estimate up front!
Agent Commission
$0 (see our magazine for details)
After Closing
Mortgage Payment
Your first mortgage payment is typically due on the 1st of the month, after the first full calendar month, after closing. For example, if you close on April 20, your first payment is due June 1.
