When the real estate market is thriving, it can be hard to find an affordable house that requires little work and perfectly suits the buyer. Purchasing a new home is quite an investment and having to put in extra work to bring a budget-friendly house up to your standards may not be worth the investment. The number one question most people ask when thinking about buying a home is “how much money do I need?” There isn’t a definitive answer to that questions, but here’s a guide to get you started.
Cash or Credit?
You can either buy a house with cash, or you can finance a new home. However, there only a few lending options that won’t require a cash down payment. You may also find that you are required to pay any closing costs in cash. Your monthly income doesn’t matter when it comes to the initial cash required to purchase a house, particularly if your lender requires a certain percentage of the loan as a cash down payment. The cash-to-close figures may also include earnest money, homeowners insurance, property taxes and lender fees.
What Are the Details?
Cash-to-close needs vary by buyer. Closing costs are associated with the lender, title company and any other professional services needed to handle the paperwork of the sale. The real estate agent usually takes the commission from the seller, but it the property was sold by the owner, you will be responsible for the agent’s fees. The property tax rates influence any prepayment costs, and the type and amount of mortgage also impact costs. You should be able to get a reasonable estimate on the costs to close from your mortgage lender.
Are There Any Home Repairs?
Your costs to purchase a new home also need to include any work that you need to do to the home. Some repair elements, such as a new roof or calling in a Knox Engineer Tulsa for foundation repair, could cost several thousand dollars. You may be able to get these items repaired by the homeowner prior to the sale, but you may be faced with significant costs to repair or replaced damaged elements as soon as you move in. You could ask the seller for a credit on the sale to alleviate some of the expenses you will have.
Prior to looking for a new home, make a financial plan. Include what you afford for a mortgage payment, what kind of down payment you have saved and what reserves do you have for things like closing costs or repairs.