How to Prepare and Budget for Buying a Home
If you’re in the market to buy a home, there are a few expected and unexpected costs you’ll need to save for. It’s important to understand all of your potential costs going into the process so you can be a more prepared and competitive buyer. We’ve put together a summary of the costs you can plan for so your homebuying process is as smooth as possible!
As you begin to save for a new home, your down payment is most likely top of mind. you may believe you need to set aside 20% of the home’s purchase price for that down payment – but that’s not always the case. You may be able to put as little as 3% down in some situations. To understand your options, partner with a trusted professional, like those at Wisconsin Mortgage, who can go over the various loan types, down payment assistance programs, and what each one requires.
Earnest Money Deposit
Another item you’ll might want to plan on saving for is an earnest money deposit. Though it’s not required, it’s something that can help you stand out as a buyer in today’s competitive market. To learn more, talk to a Shorewest agent to help you determine if it’s something that could be a useful option for you!
The next thing to plan for is your closing costs. The Federal Trade Commission (FTC) defines closing costs as:
“The upfront fees charged in connection with a mortgage loan transaction. …generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.”
You closing costs cover the fees for various people and services involved in your transaction.
New or Unexpected Home Repairs
It’s important to remember that not every home will be move-in ready. Chances are you’ll want to paint the walls, replace the floors, get new appliances or furniture for your new home. Prepare for a few costs in the first few years as you begin to make your house your dream home!
Knowing what to budget for in the homebuying process is essential. To make sure you understand these and any other expenses that may come up, partner with a Shorewest sales associate for expertise on what to expect when you buy a home.