Can You Afford To Buy

Dated: 09/30/2013

Views: 500

Your biggest concern before even starting to look at homes should be your budget. Will you be able to afford a new home? Here are a run down of the costs that you will incur when you embark on the journey to home ownership! 

  • Time: time is not a monetary cost but it is an opportunity cost. The amount of time that you dedicate to looking for a home, out with an agent, and understanding this new world will take time!
  • Gas: most Realtors today will have you follow them to the homes that you are viewing or meet you there. Gone are the days where your Realtor will drive you around. Safety and security are very important in today's world, and you can expect to be driving in your own car as you shop houses.
  • Earnest Money: this is a $500-$1000 deposit that you will submit when you put in your offer. It will be returned to you in one form or fashion (closing costs, etc.) but it is money that you need to have available as it will be cashed when the contract is ratified. 
  • Home inspection: budget about $400-$500 for the home inspection. This is money well spent- the home inspector will tell you a laundry list of everything wrong with the home, from broken pipes to missing door knobs. 
  • Termite/Moisture inspection: buyers or sellers may finance these inspections. They are not very expensive, and are very worthwhile.
  • Down Payment: For a FHA loan, you will need a minimum of 3.5% of the purchase price. So, if you were buying a home for $300,000 you would need $10,500 for your down payment. 
  • Commission: Generally, the seller will pay closing costs and commissions, however sometimes sellers negotiate to only pay half or some certain amount. Typical cost is 6% of the purchase price to be split between the listing and buying agent. 

You should save before looking into buying a house. Know your budget and make sure you stay within your range. Communicate openly with your Realtor.
I specialize in first time home buyers and would be happy to talk to you today! 
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Alycia Jordan

Having lived in other cities, such as Cleveland and Idaho Falls, I only appreciate Hampton Roads that much more. Why? Because from almost anywhere in our area, a beach is only about a 20 minute dri....

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