Buying a home right now is getting quite expensive. According to the National Association of Realtors, in March, the median cost of a single-family home increased by 18 percent to $334,500. With prices skyrocketing, here are some upfront costs of buying a home that you should keep in mind before you take the leap.
The big home-buying cost that comes first? The down payment. You’ll want to have 20 percent of the house’s price ready to go. If you don’t, you’ll likely have to pay for private mortgage insurance.
Once you place an offer on a home, you need to hire a home inspector to make sure the house isn’t falling apart. If the inspector uncovers issues, you can then negotiate with the seller on having them fixed. As you can see, an inspector is vital. And it will cost you. As Kiplinger reports, depending on where you live, a home inspector will cost between $200 and $600. That’s also money that you won’t get back if the deal should happen to fall through.
Your mortgage lender will want to make sure the home you’re buying is worth the money the company is loaning you. The lender will hire a home appraiser to assess the house’s value. The appraiser considers everything, from the size of the kitchen to property size. This process will also run you between $200 and $600.
One of the sneakier upfront costs of buying a home is the menu of closing costs. These fees usually run between two to five percent of the home’s purchase price. You’ll get an estimate of what they’ll be in actuality before you go to the closing table.