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Video; The True Cost of Home Ownership.

Financial Preparations

Buying a home is a big decision. There are many ways to get ready for homeownership, but investing in financial preparation from the beginning  helps you to be ready when it comes time to purchase your new home.

Identify your timeline

Your timeline will be an important factor in helping you define realistic financial goals  Most lenders will typically need at least 30 days to close your loan, so plan accordingly.

Understand the costs of buying a home

Buying a house costs money. But the amount of cash you’ll need depends on the type of financing you’re using, where you’re buying, and more.

Your costs and fees may include the following:

  • Down payment: You will generally need a 5% down payment for conventional loans. FHA loans require a 3.5% down payment. Using a VA Loan, qualified veterans and service members may be able to purchase a home without a down payment.
  • Deposit: Buyers often include a deposit, also known as “earnest money”,along with their purchase offer. A deposit typically  ranges from $1000 to $5,000 or more, and can be applied toward the closing costs. Service members who are relocating should talk with a knowledgeable real estate agent about what’s customary at their new location.
  • Appraisal and inspection: An appraisal establishes the fair market value of a property. It is usually paid outside of closing. Inspections are not required but is almost always a good idea to get one. Costs can vary, but you can expect to pay around  $500 for the appraisal and about $350 - $400 for the inspection.
  • Closing costs: There are many closing costs associated with purchasing a home ranging from origination fees and prepaid property taxes to paying for credit reports and more. It is sometimes possible to negotiate to have the seller pay some or all of these costs. If that’s not possible, you will need to pay those costs yourself. 

Questions? We are happy to help. Call us at (707) 763-6290 or apply now.

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