Upfront Costs to Buy a Home

So you are thinking of buying a home, but not sure how much money you need? Here’s the facts:

Upfront

• Trust money – $500-$5,000, depending on the price of the home. The more expensive the home, the more Trust money a seller will want to see. This amount will be needed within 7 days of getting a home under contract. This money, say $1000, goes towards your down payment at closing. It is deposited into the bank. Personal check is accepted.
• Termite letter – $45-$75 dollars
• Home inspection: $300-$600 dollars
• Appraisal fee: Costs range from $400-$550. (Sometimes collected up front by the lender.)

Additional money needed at closing

• Your down payment: Depending on the type of loan you are getting, down payments vary. Some people qualify for loans that require no money down, such as, THDA, USDA, and VA loans. Most loans will be 3.5% or 5% down, up to 20%. This down payment money is needed on closing day, typically wired directly to the title company.
• Closing costs: Closing costs are paid at closing by the buyer (or seller) to pay for the fees and charges accrued to process the loan. This is what pays the lender for their work to make your loan happen as well as charges to process your loan, buy down interest rate points, etc. Most commonly, closing costs are about 3% of the sales price.

Example: You buy a $200,000 house, the closing costs will be approximately $6,000. (This is just a general rule of thumb. For more in depth info on closing costs, talking directly with your lender is required.)