Note: A good Rule of Thumb on Closing Costs if you are getting a loan is 6% of the purchase price – $100,000.00 home price would be $6000.00 in closing costs.
Standard out of Pocket Expenses for the purchase of a Residential Home
1) Making your offer – Your Good Faith Deposit – This Should be as much money as you can put down – nothing less than $1000.00. Unless you are working with a Down Payment and Closing Cost Assistance Program like the Lehigh Valley HOOP Program or PHFA. This is proof that you do not have lots of money saved or in the bank and the seller understands the lower down money with your offer.
Once your Home Offer has been accepted and signed by the Seller
2) Home Inspection Fee within 5 days of your offer getting signed, in my opinion – Nothing less than $350.00 up to $600.00 (if the home has well and septic and is vacate…this will increase the cost up to and including $600.00) If the homes you are looking at have Public water and sewer and you get a Home Inspection and Termite..You are looking at about $350.00 to $400.00. Depends on what Home Inspection Company you use.
3) Appraisal Fee – This must be paid at your application appointment within the first 10 days of your offer getting accepted. This can cost on Average of $475.00. This is one major reason why you should have your home inspection done within the first 5 days. This way if you find out something that is major on the inspection and the seller will not negotiate with you..You are not wasting another 475.00 on an appraisal. Verify with your Mortgage Company
4) First Full year from Homeowners Insurance – This must be paid at least 2 weeks prior to settlement day. Settlement is Typically 30 to 45 days from the time your offer get’s signed. But, if you are purchasing a Foreclosure, then typically it may take 60 days to close. Short Sales are another story. Estimate Annual Cost: Average $700.00 per yr but depends on coverage.
5) That’s it – Then you will bring the rest of the Down Payment for your Loan that you will be getting to settlement. Example: FHA Loan requires you put 3.5% down – $100,000.00 purchase price you would need a total of $3500.00 – $2000.00 down when you make your offer and then the remaining $1000.00 and ALL closing costs the day of settlement. NOTE: Rule of Thumb for closing costs are 6% of the purchase price. But, it will depend on the home purchase price and the property taxes for the home…so, you need to get an estimate on each home that interests your before you count on anything. This will come from your Real Estate Agent & Mortgage Officer.
If you are interested in getting a FREE Home Buing Estimate tailored to your needs…just contact me via click, call or text.
You will get the following answers.
1) Estimate on your Downpayment FOR different types of loans
2) Est closing costs
3) Est property taxes based on the Home type and area you plan to purchase in
4) The monthly payment…for the loan only and also including the taxes and insurance.
5) If you need to sell first – I can work up your net proceeds based on your Estimated Home Value too
You can not make GOOD decisions WITHOUT GOOD information.
Let me guide you.
When it comes to CASH out of Pocket there should be NO Surprises