Costs to Consider When Buying Your New Home
You’re saving up to buy a new home. You’ve saved up a certain amount, and you discover there’s a house you love on the market that is going for exactly that amount. Perfect, right? If only it were that simple.
The truth is that buying your home is going to cost you more than just the purchase price of the house, and it’s going to cost you more than just the down payment up front, too. Here are some of the expenses to expect when buying a new home.
1. Down Payment and Earnest Money Deposit
As soon as you tender your offer, you will usually be expected to provide an earnest money deposit. This is a good faith deposit that is about one to three percent of the total price of the home.
When the seller accepts your offer, the earnest money becomes part of your down payment, which is usually 20 percent of the purchase price. It can be less, but this can trigger Private Mortgage Insurance and other unwanted expenses.
2. Home Inspection
You will need to pay for the home to be inspected. It’s important to find a reliable home inspector who can locate any potential issues with the home’s systems. This will usually cost you around $500.
3. Closing Costs
These are the fees that the various entities involved with the home sale get. They can include things like title fees, mortgage processing fees, real estate attorney fees and tax payments.
The total cost of the fees will vary, but you should have about five percent of the purchase price socked away to make sure you can cover them.
4. Cash Reserves
A lender may require you to show that you’ll have some cash left over after you pay the upfront costs of your home. They usually will want to see you have about six months of mortgage payments in reserve.
This is not an actual expense, but it’s something you should calculate when trying to see if you have enough money for the home you are looking to buy.
Buying a Home in South Carolina
When you are ready to buy your home in South Carolina, look to SK Builders. We can create a semi-custom built home to your specifications, so you walk into the home you’ve always dreamed about. We have several beautiful South Carolina communities where we can build your amazing new home, or we can build on your own lot if you prefer.
You’ve saved up for the home of your dreams. Let us make sure it’s everything you hoped it would be. To learn more, contact SK Builders today.