Buying a home is the American dream. While it’s obvious that buying a house takes money, some of the lesser-known costs can really add up quick, catching some potential homeowners off guard. Here’s a list of those possible costs as you save toward your dream home.
1. Down Payment
Depending on how much home are you planning to finance, it’s smart to save upwards of 10% of the full purchase price as a down payment. This will help save you thousands of dollars in interest payments and reduce your monthly mortgage payment. Some lenders do forgo the down payment or have programs that allow for as little as 0% down. Rivermark offers 100% financing options.
2. Earnest Money
This is a cash deposit you make when you submit an offer. Typically, it is several thousand dollars or 2% of the asking price. This shows your intent to buy the property. If your offer is accepted, it goes toward the down payment. If not, you get the earnest money back.
3. Closing Costs
These vary by lender, but always include all the fees to finish the sale of the home, including title insurance, appraisals, tax escrow, and transaction fees. These can add up to 5% of the home purchase price.
4. Post-purchase Reserve Fund
In some cases, Rivermark requires that you have at least two mortgage payments in savings to prove that you can make your payments.
It All Adds Up
Let’s say you’re financing a $300,000 home. All of those above costs would add up to $51,000 in costs and fees, and several thousand in savings to cover your first few mortgage payments. Of course, your costs will vary, and there’s always a chance your lender will not require a full down payment.
We Can Help You Become a Homeowner
We can even help you save up the money you’ll need for the down payment, closing costs, and other fees with direct deposit and special savings accounts. Give the Rivermark mortgage team a call at 503.906.9497 or stop by any branch to get started.
Our home loan resources page can help you make informed decisions as you prepare to purchase a home or apply for a mortgage. And, as always, you can call Rivermark and speak directly to a mortgage expert by calling 503.906.9497.