Posted on Jan 7, 2019

The Legacy Group, Ltd.

Finance Home Costs:

There’s nothing more exciting than buying your first home. Whether it’s a condo for one, a sprawling mansion, or anything in between, buying your first home makes you feel like a true grown-up.

While you’ve probably already figured out exactly how much home you can afford, which is something your mortgage broker will communicate to you fairly quickly during the mortgage approval process, have you considered the cost of all of the other expenses associated with home ownership?

Here are just a few of things you need to be aware of if you’re looking to purchase a home for the first time:

A down payment. If using a VA loan, you won’t have to come up with a down payment, and FHA loans only require a 3.5 percent down payment, but traditional mortgages usually require between 5 and 20 percent down, depending on your credit history as well as the cost of the home.

Closing costs. Even if you’re lucky enough to minimize the down payment needed, you’ll still have to pay closing costs, which typically run between 2 and 5 percent of the purchase price, meaning for a $200,000 home, you’ll pay between $4,000 to $10,000 in closing costs.

Homeowners insurance. If you’re currently renting, you likely have renter’s insurance. (If you don’t, you should.) However, it’s important to keep in mind that homeowner’s insurance premiums are typically about twice as much as a renter’s insurance policy.

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