How much money will you need to buy a home?
That depends on a number of factors, including the cost of the house & the type of mortgage you get. Before you start shopping, it’s important to get an idea of how much a lender will actually be willing to give you to purchase your first home, but with the help of Local Katy Realty you will be guided to have all the requirements & answers before ever approaching a lender or bank & you will know what to do & how much money you will need to start & finish the process. In general, you need to come up with enough money to cover three costs:
- earnest money – the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house
- down payment – a percentage of the cost of the home that you must pay when you go to settlement
- closing costs – the costs associated with processing the paperwork to buy a house.
When you make an offer on a home, your earnest money goes into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies.
The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. That’s why many first-time home buyers turn to HUD’s FHA for help. FHA loans require only 3% down – and sometimes less.
Closing costs – which you will pay at settlement – average 3-4% of the price of your home. These costs cover various fees your lender charges & other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won’t be caught by surprise.
When it comes to finding the right real estate agent, there is none better than a Realtor like Laura Hill at Local Katy Realty who cares & fights for her clients. http://www.localkatyrealty.com