How Much Will It Actually Cost to Buy a House?
Did you know that 31% of homes sold in 2019 were bought by first-time homebuyers? If you are thinking about buying your first house, you may feel confused and overwhelmed.
Are you wondering about the cost to buy a house? If you are saving up for a house, you may assume that the total cost is equal to the value of the home you are buying.
In reality, there are several other costs involved in the home-buying process. Keep reading to learn all about home buying fees.
One of the biggest costs you will encounter when buying a home is the down payment. When buying a home, most lenders expect a down payment of around 20% of the total cost of the home.
If the down payment is holding you back from the house of your dreams, there may be other options.
You can look for a lender that doesn’t require a down payment or apply for a grant, like the American Dream Grant, to help with the payment.
Another expensive part of the home buying process is the closing costs. On average, you can expect to spend around 2-5% of the total house cost on the closing costs.
Some of the most common closing costs you will have to pay are the real estate agent fee, house inspection, appraisal fees, and transfer tax. In some cases, the seller may be willing to help you pay these fees.
Monthly Mortgage Payments
Once you have paid the initial fees to buy a house, you will have to pay the recurring fees. The biggest recurring payment will be your mortgage payment.
Unless you have enough cash to buy your home, you will need to borrow money from a lender. You will pay the lender back each month, and in most cases, you will pay interest.
Before settling on a mortgage, be sure to do plenty of research to find the right mortgage for you. You can save a lot of money if you choose a mortgage with good interest rates and terms.
Another expensive recurring charge is house insurance. Homeowners’ insurance will depend on the state and city you live in, but it is required in most states.
The purpose of homeowners insurance is to protect your home from accidents and natural disasters, such as earthquakes, fires, and hurricanes.
If you live in an area prone to natural disasters, you may have to pay more money each month. Like mortgages, you can shop around to find the best rates.
Many insurance companies let you save money by bundling your car insurance and life insurance.
Are You Ready to Calculate Your Cost to Buy a House?
While the process of buying a house may seem expensive and overwhelming, it’s not bad if you prepare and know what to expect. Now that you are aware of house-buying fees, you can determine your total cost to buy a house.
Do you want to learn more about how to buy a home? If so, check out the buy and sell category for more helpful home-buying advice.