Most buyers know when they are planning to buy a home they need to consider the mortgage payment and the utilities. Possibly they have already taken into the account the added insurance and taxes as a part of their monthly payments. They are also probably aware they will need some cash for a downpayment.
But beyond these vague numbers, they are unsure exactly how much cash they will need to get them through the buying process. It is unfortunately more than just putting cash down for the mortgage, but on a positive note, most buyers are also misinformed about the percentage of cash they need as a down payment. They often think it is more than most loans require.
So, to clear it all up I have quickly highlighted all the expenses you will need to pay for prior to ever submitting that first mortgage payment.
At Time of Accepted Offer
During Contingencies
~ You will need to pay for various inspections during the contingency period. Here is a general price breakdown of the most common and recommended inspections:
- A general home inspection is $400-$750
- Termite inspection is $150-$250
- Radon inspection is $150-$300
- Sewer lateral inspection $200-$300
- **There are other inspections or professional assessments that may be recommended depending on the property.
~ Survey of property. This is typically ordered and completed during contingencies but is not paid for until closing. It is $250-$500 depending on the size of property.
~ Depending on your lender, they may also require that you pay for the appraisal up front. Some lenders will include this payment in your closing cost. Roughly $350.
At Closing
~ Closing costs for the Title Company and Lenders services. This is typically around 3-4% of your sale price.
~ Down payment for the property. You will decide with your lender how much you want to put down but it can be as low as 3% of your purchase price. There are options as well for down payment assistance in certain occasions. You should discuss your options with a reputable and knowledgeable lender.
At Possession
~ The cost of just moving your stuff should not be underrated. The average costs of movers is around $1,250. But even if you move yourself, you have to consider the cost of gas, rental costs for a trailer, and if you are roping friends and family into the job, you should at least buy them dinner! Don’t forget to set some money aside for moving.
~ Home buyers will typically spend close to $6,000 in the first year at their new home on basic repairs and updates. This can include paint, hardware and light fixture updates, landscaping changes and cleanup.