Every now and then, we all wish money grew on trees. This is especially true when you are buying a home.
Buying a home takes financial preparation. So financial readiness is crucial.
Most people who are successful home buyers spend months saving for a home. You’ll need money
saved in order to buy a home beyond your first and last month’s rent. You'll need to be ready to pay your
mortgage and utilities monthly and also be ready if HVAC or your fridge stops working. So you could start off by asking;
If I am buying a townhouse that cost $450K, how much money is needed to get into this home? The best thing to do
is to start by finding the right lender. The right lender is a lender who finds the right loan with the best benefits for you as a buyer.
More importantly start saving for your large purchase now.
Tips for buyer;
1. Find a lender and ask about loan types; fixed or variable loans.
Understand the terms of each loan and what the benefits of each loan will be to you.
2. Make sure you are credit worthy. If your score is less than 600, try to improve it to an even higher score.
Your credit affects the interest rate a lender is going to give you. So a lower credit will mean a high interest which
means you will pay more every month.
3. Find out how much money is needed for closing costs. Your closing costs could be as high as $13,500 or more on the 450K home.
This money is used to pay for services for lender, settlement attorney and many other things when you are buying a home.
4. Find out how much money is needed for the down payment of the loan?
This is the deposit you are required to put down for your loan. Talk to the lender about whether
you need to put down 3% or 10% or 20% towards your $450K loan;
Here is what you need for deposit if your percentage is:
5. Set aside money to be used for Earnest Money Deposit(EMD)- Have this money ready when you make an offer on your home. For your 450K home, EMD could be as high as $13,500. Do not worry this money will be added back to the deposit when you buy the home.
6. Have money for inspections of the house. Inspections could be as high $1000 or even more for the size of this home.
If you follow these simple steps, you are on your way to your new home!!