How To Save For A New Home

As a first-time home buyer, the first thing that comes to mind is saving for your down payment. For my home buying newbys out there, you’ll need to be prepared for several other expenses along the way.

1. Earnest Deposit. This amount can vary depending on your market but you can expect to spend around 1% of your purchase price. This deposit will show up as a credit to you at closing.

2. Inspection. This is an out-of-pocket expense that you’ll pay upfront during your option period. A home inspection can cost around $400 depending on the home (this will go up if there is a pool, sprinkler system, septic, well, etc).

3. Appraisal. An appraisal is typically ordered by your lender and the price can vary depending on property size, location, loan type, etc. If this is not paid upfront you can expect to see this expense included in your closing costs.

4. Down Payment. A first-time home buyer can expect to put down as little as 3% of the purchase price. Of course, the more you put down the lower your monthly payments will be. Mortgage lenders offer a variety of programs for first-time home buyers with even lower down payments. Lmk if you want more info on these amazing programs.

5. Closing Costs. Your lender will be able to give you a closing cost estimate when you apply for your loan but you should expect somewhere between 2-6%. Closing costs can include your appraisal, survey, taxes, and prepaids. Some of these fees are tax deductible if this is your primary residence.

As always, my goal is to simplify the home buying process and give you the confidence to get the ball rolling on your first real estate investment. Reach out with any questions!