Buying a home? Make sure to save enough to cover all of the upfront costs.

When starting on the road to home ownership, many experts recommend starting your planning and budgeting process a good 12 months ahead of time. You’ll need this time to save money for the expenses related to purchasing a home. What are these expenses? Here’s a breakdown of a few of the most important ones.

Down Payment

Most borrowers are required to make a down payment, aside from those purchasing with VA loan benefits, down payment assistance or first time home buyer programs. Knowing how much your down payment is will help you know how much you need to save.

• FHA home loans require 3.5% of the price of the property as a down payment. For a $100,000 home, the down payment would be $3500.
• Conventional loans require a minimum 3% down payment. This would come out to a $3,000 down payment on a $100,000 home.

Inspections

An inspection will allow you to find out if there is anything wrong with the home.  We do not recommend purchasing a home without having it inspected. Home inspection fees are based on the size of the home and average from $300-$600.

Closing Costs

At closing, the property is transferred from the seller to you, the buyer. Closing costs can vary based on the lender and the type of loan. On average, you can expect to pay between 1-3% of the purchase price. Some closing costs are negotiable and can be covered by the seller depending on your market. Since this can vary, it’s best to be prepared to cover all costs.

These costs include the following:

• Lender Fees – These can include costs for document preparation, underwriting​, origination, and more.
• 3^rd Party Fees – These are costs that do not involve your lender. These usually include but are not limited to title fees, appraisal fees, survey fees, and home owners insurance.

Preparing to buy a home? Call MSI Credit Solutions to make sure your credit is where it should be.

Are you preparing for the home buying process? Having optimal credit will make for a smoother process. If you’re unsure where your credit is at, it’s always a good idea to consult with a credit counselor or credit expert. MSI Credit Solutions assists consumers with credit services, real estate services, and lending resources.

MSI Credit Solutions provides superior credit restoration and comprehensive consulting services that are reliable and affordable. Call today for your free credit repair consultation! Contact us at (866) 217-9841. 

*The information in this article has been provided strictly for educational purposes.