It cost how much to buy a house? Most
people are surprised by how much it
takes to buy a house.
And most of the time, it's not as much as
they think.
Join me as I walk through how much it
costs to buy a house.
Let's do it!
Welcome back i'm jonathan McCoy with
Keller Williams Realty Chattahoochee
North
and I'm a realtor in Duluth Georgia and
the metro Atlanta area. If you're new to
my channel
I share about all things real estate,
home ownership
and life in Duluth Ga and the metro
Atlanta area.
We are getting into a topic I'm asked
about a lot and
that is how much does it cost to buy a
house.
There's all kinds of misinformation
out there when it comes to
buying a home. One of the primary
misconceptions is
about down payment. Down payments on a home
can vary drastically. A lot of people
think you need
twenty percent down to purchase a home.
Some think you need
five percent down. Would it surprise you
if I told you that there are
loans that exist that ask for zero
percent down.
Now most common zero percent down loan I'm aware of is the VA loan.
If you're a veteran, you can qualify for
a VA loan and
can not only have a zero percent down
loan but there's no
PMI (that's mortgage insurance) on a VA
loan.
There's a program also called the
Georgia Dream Home Ownership program
which was created for first-time home
buyers
and low-income buyers. This program gives you money
down towards a down payment Depending on your situation,
the program can give you five thousand,
seventy five hundred or even up to
fifteen thousand dollars.
If you have a low enough sales price,
this money could cover your down payment completely
and some of the closing costs. One thing
to note with these types of programs,
which are called down payment assistance programs,
is that you may be given a much higher
interest rate with these
than other types of loans. Though it may
look good up on the front end,
for the life of the loan you actually
may be paying more. A piece of advice
I will give you is get a good lender and
talk to them about all the different
options you may have.
A good lender should be able to tell you
all the good, the bad and the ugly
of each type of loan that you qualify
for.
For those not eligible for either of
these then there are loans as low as three percent
down. If you're looking for a home that's
in the two hundred thousand dollar range,
we're talking about six thousand dollars
in down payment.
Okay, next thing to consider when you are
buying a home
is closing costs. Closing costs consist of
closing attorney's, fees lender fees,
title insurance and taxes
associated with buying a home. In
addition,
there is money that will be needed to
put into an escrow account that
will be needed at closing. Your
escrow account is set up by your lender
to pay for
your taxes and homeowners insurance. The total cost of this
is known as cash to close.
This amount will be between three and
three and a half percent of the sales
price of the home depending on the price
point.
If we keep the home sales price at two
hundred thousand dollars,
we're talking about seven thousand
dollars in closing costs.
But i have good news! You as the buyer
can negotiate with the seller
to pay some most or even all of the
closing costs.
So instead of you paying seven thousand
dollars, you can negotiate for the seller
to pay
that seven thousand dollars. Another item
to talk about is your earnest money. Now
earnest money is good
faith money that the buyer puts down
that is taken up front
and put into an escrow account. This
amount varies for each offer.
Great news about earnest money is that
this money, if you go all the way to
closing,
is money that is just used as part of
your down payment.
Or if you don't have a down payment, you
can apply it to your closing costs.
So this isn't in addition to anything we
have talked about yet
but this amount is a needed upfront.
Now, too many people stop there when it
comes to figuring out how much it costs
to buy a house.
There's more to it than that.  There are
some
upfront costs needed. One of those
upfront cost items is
a home inspection. Now you could opt to
not do a home inspection but
that'd be crazy and you should never do
that.
Always get a home inspection. Even if you
buy a brand new home,
get a home inspection. You need a home
inspection!
And make sure it's a good home inspector. Look
it's great that your neighbor's, brother's
cousin's, boyfriend or whomever does home
inspections
but make sure he actually or she
actually does good ones.
I've seen some terrible home inspections
done. Not by any inspectors I would
recommend but i have seen them.
Get someone who has done a lot of
inspections and comes
highly recommended. And don't be cheap on this one!
Home inspections will vary in cost
depending on
your inspector, the size of the house and
if there's a crawl space, basement or if
the house is on a slab.
Typical home inspections run about
$400.
Now if the home inspector finds
something such as
settling in the house, an issue with the
HVAC system,
you may need additional inspections done.
These inspections can cost you money.
Another thing that you must get done if
you're getting a loan for your house
is an appraisal. The lender orders the
appraisal
and these run about $500. These can vary
as well depending on who your lender
is and who they use for appraisals. Let's
now break it down
to what I typically see for someone
wanting to buy a $200, 000 home with a 3.5 down FHA loan.
I usually see that type of buyer asking
for around
five thousand dollars in seller paid
closing costs. So
for this particular buyer you would have
seven thousand dollars in down payment,
about twenty five hundred dollars in
closing costs, your inspection
of four hundred dollars  and your
appraisal of $500.
That runs your total amount needed to
ten thousand four hundred dollars.
For a first time home buyer, saving up
to about eleven thousand dollars gets
you into a two hundred thousand dollar
home.
Now if you qualify for some down payment assistance or if you get a VA loan
you can get in for much less.
I've personally seen someone buy a two
hundred fifty thousand dollar home for
as little as three thousand dollars
this person had a VA loan negotiated, six
thousand dollars in seller paid closing
costs
and they only had a little bit of
closing costs and the inspection
and the appraisal to pay for. If you are
like most people I talk with,
you're probably surprised about how
little you can purchase a home for.
One thing Ilove about real estate is
that every situation and deal is
different.
If you have questions about your
specific situation,
please feel free to ask them in the
comments section
below. Or give me an email or you can
even give me a call;
my information is also below. If you like
this video
you may want to check out this video on
the steps it takes to buy a home from
start to finish.
I'm Jonathan McCoy and I post every Thursday
Thanks and I will
see you next time
