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Cash It Takes to Buy a Home

May 5, 2022

There are a lot of costs associated with buying a home. The purchase price is just the beginning. There are also costs for inspections, appraisal, loan origination, title insurance, and more. Then there are the ongoing costs of homeowners insurance, property taxes, and maintenance.

Let’s break it down in a simpler way to help you make the most informed decision when buying a home!

First, determine the down payment, which can be as low as 3% or over 20% of the purchase price depending on the type of loan you choose. Next is your credit score. A credit score of 620 or higher should allow you to qualify for a mortgage, but some lenders using government-backed loans may allow for lower scores. It’s a really good idea to get a pre-approval letter before you start. This proves to sellers that you have the financial clout to stand behind your offer. A professional home inspection is recommended and can range anywhere from $200 to $600. Another necessary cost is the Appraisal, which on average, can range from $300 to $600. Now let’s talk about your closing costs, which run on average from 2% to 5% of the loan cost. Last but not least, you have your “prepaids”, which are different from your closing costs. These will vary depending on the amount of your loan, type of loan, and area. These include property taxes, homeowners’ insurance costs, mortgage insurance, and more.

It’s important to have someone in your corner when purchasing a home, especially in the market we are currently in! When meeting with a realtor, they will go over all of these costs with you in detail to help you determine what you can afford and what is the best decision for you. A realtor will also be able to help you find a home that meets your needs and budget. Realtors can also help you negotiate the purchase price of a home and help with the paperwork involved in buying a home.

That was a lot to take in at once and we understand that this market can be scary for a buyer. Our agents are equipped with the knowledge and connections to assure a smooth and successful purchase! Since these are big ranges, your BHHS Florida Properties Group agent can really help narrow the gap and maybe help negotiate with the Seller to cover some of these costs.

Olivia is southern hospitality wrapped in compassion. She is as sweet as she is fierce and never hesitates when others ask her for help. Aside from being a mega talented writer she also takes on all of our special projects and events as our Brand Strategist. She uses the education she got from Bama {she would insert a “Roll Tide” here} to help give our clients an authentic look at who we are. She’s a larger than life, laid back bundle of joy who is as genuine as they come.
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