This is another question best answered by the lender. There are often loan programs available to help with down payments, closing costs, and sometimes both. Aside from the down payment and closing costs, there are also some times in the purchase process that money will be needed.
Earnest Money: Once you have been pre-approved for a loan and you have found your dream home, made an offer and had if accepted…you will need to deposit earnest money. There is no set amount for this, but many sellers and listing agents would like to see earnest funds close to around 1% of the purchase price. So if you are buying a $200,000 home $2000 of earnest money is often expected. Earnest money will be held by the title company, a neutral 3rd party in the transaction. This money can be used towards down payment or closing costs at the close of escrow.
Inspections: Once an offer is accepted you will have 10 days to do inspections. Prices for this range on the size and age of the home, and whether the property has a pool and spa. Usually these range from $350-$500. Often buyers will also do a termite inspection, (usually $50-$75) and if additional inspections are needed then there may be additional costs involved in those.
Appraisal: Appraisals are usually paid up front, and done about 10 days after contract acceptance. Appraisals usually cost $400-$500…but the lender will be able to give you more specifics about this.
Those three costs will be needed before the purchase of the house, but the lender will be able to give you more specifics of how much you will need to cover closing costs and down payment. Don’t forget to budget for moving day too!
Posted in: FAQ for Buyers