Here are some of the terms you need to know that pertain to the total cost of a home purchase.
What’s the true cost of buying a home? I could throw out some ballpark numbers, but there would be a big asterisk attached: The cost always depends on your situation. The first step is to get in touch with a lender immediately if you’re serious about buying a home.
From your lender, you’ll hear more about the specifics of these associated costs:
- Closing costs—the total amount of money it takes to bring to close
- Down payments—usually 3.5% down for an FHA loan; 0% for a veteran through a VA loan; and 10% to 20% through a conventional loan
- Prepaids, or reserves for taxes and insurances required by your lender
The sooner you can sit down with your lender, the sooner you can budget for these costs. If you plan thoroughly, you won’t be surprised by any of them.
Reach out to me if you have questions about this or any other real estate topic. I’m always here to help.