When buying your first home, it is necessary to be financially prepared as there are several costs beyond just the purchase price of your new home. This makes working with a trusted Realtor® paramount when preparing to invest in a Myrtle Beach home. The CRG Real Estate team has compiled this guide to some of the fees novice homebuyers may not be prepared for as you begin searching for property.
Let’s take a simple look at the two largest monetary charges involved when it comes to getting you through the door of your first home: the down payment and the closing costs.
The most well-known cost associated with home buying is your "down payment," which is the cash you are required to pay upfront. Serving as beginning equity, the amount of your down payment is later deducted from the total amount of your mortgage. (Check out our Real Estate Lingo Blog for common definitions, acronyms, terms.) Down payment amounts vary largely from as little to 3.5% to more than 20% of the home purchase price. It’s important to work with a Realtor® and trusted Lender to determine how much you need to put down on your home.
During the home buying process you will notice there are a lot of people working alongside you and your Realtor® to make the transaction happen. Because of this, there are “Closing Costs” allocated for various expenses and fees paid for services rendered during the formalization of your mortgage and final sale. The amount will vary per individual situation and depend on the loan type, but can generally be expected to cost between 2-5% of the purchase price.
Closing costs commonly include:
- Loan origination fees
- Points, or loan discount fees you pay to receive a lower interest rate
- Appraisal fee
- Inspection fee
- Credit report
- Private mortgage insurance premium
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
- Deed recording fees
- Title insurance policy premiums
- Notary fees
- Prorations for your share of costs such as utility bills and property taxes
Albeit necessary in order to get the keys to your new home and finalize the sale, closing costs can potentially be negotiated with a contract for the Seller to pay. However, it’s wise to make sure you have enough money budgeted to cover the costs yourself. Talk with your CRG Real Estate Professional about your options.
Now You're Ready To Buy
Buying your first home is exciting, however it’s important to remain knowledgeable about the finances needed to finalize the deal. Our CRG Real Estate Professionals are knowledgable and experienced Agents who can assist you and answer any questions you may have. If you are ready to get started and would like to discuss the costs of buying a home please contact a member of our team today!
Disclaimer: The information contained in this blog is for general information purposes only. CRG Companies Inc. makes no representations or warranties of any kind. Any reliance you place on such information is therefore strictly at your own risk. Please verify all information with a CRG Real Estate Professional prior to making any decisions to buy or sell real estate.