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  • Writer's pictureMolly Reed

How Much Cash Do I Need to Buy a Home?


Did anyone else grow up thinking they had to put 20% down to buy a home? News Flash: You don't!


To start off, it's important to know that your monthly payment will include taxes, insurance, mortgage payment and any other fees such as condo or HOA fees. This number is what a lot of home buyers are focused on when purchasing a home, and it’s important, but also important is having a realistic idea of how much money you’ll need UP FRONT before your monthly payments begin.


Here are the up front costs of buying a home.


Cost #1: EMD Check. EMD is your Ernest Money Deposit and it’s a check for about 1% of the purchase price that you submit with your offer. This is letting the seller know that you are financially invested in getting to the settlement table and purchasing the home. This check sits in escrow with the Title Company and goes towards your closing closets on settlement day.


Cost #2: Inspections. Your inspections are an up front payment and are dependent on a few different factors. Prices will vary between inspection companies. It’s also dependent on the size and features of your house as well as what inspections you’d like completed. We usually suggest at a minimum a general inspection, termite inspection and radon inspection. This will typically run you about $500-$600.


Cost 3#: Down payment. This is that tricky number that always seemed unattainable as a kid. But you don't have to put 20% down! Here's a general breakdown of the down payment amounts based on mortgage type.


VA Loan- 0%

Conventional- as low as 3% down

FHA- as low as 3.5% down


The more you put down the lower your monthly payments will be.


Cost #4: Closing costs. Closing costs are items like pre paid taxes and fees that need to be reimbursed to the seller, title and lender fees, state and local transfer and recordation taxes, etc. They can add up to be anywhere between 3-8% of the purchase price.


Cost #5: Miscellaneous expenses. A few other costs not to forget about are additional personal expenses. If you need to hire movers, purchase more furniture, rent a truck it’s important not to forget about these payments as then can add up and become a substantial cost.


For more information about costs associated with purchasing or selling a home click the link below for free resources.




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