Buying A Home


There are three different categories of home buying expenses (not including the mortgage)

1. Pre-Closing Expenses (Paid prior to the closing on your home)
  • $50 – $150 – Credit Report Fee (non refundable). Paid to your lender at the time of loan application to run a credit report.
  • $200 – $400 – Home Inspection Fee. Optional but highly recommended. Pays for a professional inspection of the home you are purchasing. Paid within 10 days of going into contract.
  • $500 – $5000 – Earnest Money or Good Faith Money (varies according to the price of the home). This money is held (deposited in an escrow account) by the title or escrow company and then put towards closing costs at closing.
2.Closing Costs (Paid at closing)
  • Lender and closing fees. Depending on the real estate market these fees can be paid by the seller on your behalf. These are the up-front fees charged by your mortgage lender, title company and other service providers and typical come to about 1-2% of the purchase price
  • Prepaid items – costs you are required to pay at the time of settlement (i.e., accrued interest, mortgage insurance premiums, taxes and hazard insurance escrows).
  • Reserves – most conventional loan programs require buyers to have at least two months’ PITI in savings after the down payment and closing costs are paid. Government loans su ch as FHA and VA loans do not typically require reserves
3. Down Payment (Paid at closing)
  • 0% to 20% of the purchase price of the home, depending on the type of loan chosen. There are many $0 down payment options available to home buyers. The greater the down payment, the lower the monthly payment.