Top Piece of Advice From A Christian Realtor
Submitted by: Lady Danielle Burston
When you’re considering a home purchase, it’s best that you pray about it, let the Lord order your steps, then create a wise plan so you’ll be better off in the long run! Most people dream of home ownership and going into the search with the right expectations will set you up for success. If you’re thinking and are unsure get with a lender to start the process. Most people are surprised that they even qualify for a mortgage. Check this very important tip below.
Be Prepared for Closing Costs
Saving for a down payment in preparation for buying a new home is pretty common knowledge. With the mortgage meltdown, most mortgages that allowed zero down payments disappeared. While FHA and VA loans still offer little to no money down, most potential homebuyers will need to save at least 5-20% of the home value.
Unfortunately, many first-time homebuyers are dismayed to learn that in addition to the large down payment, they also owe thousands of dollars in closing costs that they might not have expected. The national average for closing costs ranges from 2-4% of the purchase price, which adds considerably to the amount of savings needed to buy a home. In addition, while not a closing cost, most lenders also require a savings reserve equal to at least two months of the mortgage payment. Needless to say, it adds up.
Let’s break these costs down.
Closing costs include fees charged by the escrow or closing attorney, as well as costs associated with obtaining a home loan, including:
- Escrow fees
- Title search and filing fees
- Appraisal fees
- Home inspection fees
- Wire transfer fees
- Loan costs – These include what are termed “points”; each point is 1% of the purchase price and is used as both commission for the lending officer and as an upfront fee to reduce the loan interest rate.
These are just a few of the extra costs associated with buying and closing on a new home. It’s important to know these costs ahead of time, so potential homebuyers can save the appropriate amount of money needed to buy a home. Nobody wants to be surprised by unexpected costs.
If you’re not sure whether it’s a good idea for you to purchase a home, talk to a financial advisor or trusted mentor. Choose someone you can trust with your financial information and tell them everything. Give them a complete picture of your financial situation and ask them for an outsider’s perspective. No one can guarantee your future, but an outsider’s perspective is helpful for big financial decisions. Happy House hunting!