What You Need To Budget for When Buying a Home

There are many trusted professionals who can help you understand your finances and what you’ll need to budget for throughout the process.

To get you started, here are a few things experts say you should plan for along the way.

1. Down Payment

The National Association of Realtors (NAR) says:

“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership. Having this knowledge is critical to know what to save . . .”

To understand your options, partner with a trusted professional who can go over the various loan types, down payment assistance programs, and what each one requires.

2. Earnest Money Deposit

First American explains what it is:

“The deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in trust by a third party and is intended to show the seller you are serious about purchasing their home. Upon closing the money will generally be applied to your down payment or closing costs.”

An earnest money deposit could be the very first check you’ll write toward your purchase.

3. Closing Costs

The Federal Trade Commission (FTC) defines closing costs as:

“The upfront fees charged in connection with a mortgage loan transaction. …generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.”

Basically, your closing costs cover the fees for various people and services involved in your transaction.

Knowing what to budget for in the homebuying process is essential. DM me so you have reliable expertise on what to expect when you buy a home.

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