Are you thinking about purchasing your first home? If this is your first home you don’t want any monetary surprises once you get a home under contract. The following are terms you should be aware of and funds that you may need, depending on your financial situation.
Earnest Money - This is the money that you will need to put down when you make an offer on a house. This is required to prove to the seller that you are serious about purchasing their property. Usually this amount is 1% of the purchase price. Once you are under contract the listing agency and/or Title company will cash this check immediately.
Home Inspection Fees: These charges can vary depending on the size of the property and/or the inspector, usually $250-$450 plus any additional testing you may require. You will need to pay the inspector at the time of the inspection.
Down Payment - This is the amount of money that you will be using to make a down payment on the property. There are numerous down payment assistance programs. Some are grants that you don’t have to repay and there are down payment assistance programs that you need to make monthly payments on. We work with a variety of lenders that can help you determine if you are eligible and what type of assistance you qualify for. The required down payment can range from 0-5% depending on the type of loan that you and/or the property qualify for.
Closing Cost - This is the fee charged by the lender. Depending on the lender these cost can vary. Some lenders will cover some or all of these cost in the loan and others will require this money at closing. You may also be able to negotiate at the time of the offer with the seller for seller concessions. Seller concessions are the dollar amount the seller is willing to pay of your closing cost. Even in this seller’s market your Real Estate agent may be able to negotiate for concessions depending on the property.
Closing costs may often include things such as:
A fee for running your credit report.
A loan origination fee, which lenders charge for processing the loan paperwork for you.
Discount points, which are fees you pay in exchange for a lower interest rate.
Survey fee, which covers the cost of verifying property lines if required.
Title insurance, which protects the lender in case the title isn’t clean.
Title search fees, which pay for a background check on the title to make sure there aren't things such as unpaid mortgages or tax liens on the property.
Escrow deposit, which may pay for a couple months' property taxes and private mortgage insurance.
Recording fee, which is paid to a city or county in exchange for recording the new land records.
Underwriting fee, which covers the cost of evaluating a mortgage loan application.
Steve and Sherri Stinnett
C3 Real Estate Solutions