So you are ready to buy a home. The first thing you need is to know your budget. What are the expenses when buying a home?
1 The house let’s say 500,000
2 Inspections – Home inspection covers the relative condition of
heating and cooling system, electrical system, plumbing, walls, floors, ceilings, foundation, roofing, drainage, and basement (approx. 250- Radon sometimes extra) Tank sweep (approx. 250) Optional Inspections: Pool (approx. 200), Chimney (approx. 200), Mold Testing (approx. 200 if applicable)
3 Closing costs – Typically includes a variety of expenses above the purchase price of the home. Hiring a Real Estate attorney, title search, title insurance, taxes, lender fee, as well as homeowners insurance. * There are lenders who have on occasion failed to include the taxes on the property. Very important to hire the right mortgage lender. Surround yourself with people who know what they are doing.
4 Move in repairs – Icing on the cake. You may not need anything so this is only if you MUST paint or pull rugs, or anything not covered by Home Inspection repair requests.
5 A 500,000 dollar home – 20% down is 100,000, plus Inspections – 1500 should more then cover, Closing costs – taxes 35,000 (You don’t want to overlook this expense) Closing costs can vary and putting an exact number on it is not realistic. Assume 10,000 (APPROX.) on top of the taxes. These specifics can be detailed out for you with your mortgage banker.
6 Known unknowns – Inspection or closing costs you should always count on the unknowns. a 5,000 – 10,000 buffer is a safe buffer to have in the bank … just in case.
7 In conclusion – having 150,000 available for the purchase of a 500,000 property is a comfortable position to be in. Houses have been bought with less and every house buying transaction is different.
Again, I just want to reiterate a basic disclaimer: I am not a Real Estate Attorney, or a licensed home, pool, chimney, tank sweep inspector. For specific answers to Mortgages, budgeting, legal questions always refer to an expert in those fields.