Some reports are showing that homes in today’s market are significantly less affordable than in the past…by sixty one percent by some reports! We do not tell you this to discourage you by any means. We just want to make sure you are aware and share some tips with you. If you plan ahead and are financially smart, the affordability nature of buying a home is there for you.
To start, make sure you know what to expect when it comes to buying a home! This includes a down payment, closing costs, and earnest money. On average, your down payment will be three to twenty percent of the sale price. As you can see, this can vary significantly. On average the closing cost can be two to five percent of the loan. We have talked about this subject extensively in the past. The closing cost seems to come as a surprise to some people for some reason – especially what the cost can be. Earnest money, on average, can be one to three percent of the purchase price of the home. The earnest money is paid when you make an offer on a home and gets applied to the down payment. As the buyer, you actually have control over the costs. Especially by researching all of your options and what all of the lenders require. Doing this type of research can save you quite a lot of money.
Some people forget that you also have the ability to negotiate any fees that may be associated with your mortgage. This can help you to lower closing costs and save all kinds of money. The loan origination fees is something that a lender has the ability to decrease. As with anything in life it never hurts to ask.
Next week we will give you more ideas to you as to how you can lower the cost of buying a home!