2011 will be a great time to buy a home because home prices are down and the number of homes for sale will continue to hit record highs! In other words, 2011 will remain a buyer’s real estate market and opportunities to buy your first home or a “move up home” will be abundant and affordable. If you have made a resolution to become a home owner in 2011, it’s never too soon to begin some initial research and goal setting to get you on your way to your new home.
There are a few common questions regarding the amount of money required for the purchase transaction that potential homebuyers ask. These questions will help you determine your own homebuyer’s plan of action.
How much money will I need for a down payment for my new home? The amount of down payment money you will need to meet your 2011 New Year’s Resolution will depend on the type of mortgage financing you choose. The four most popular types of mortgage loan options are Conventional, FHA, VA, and USDA. USDA and VA loans require no down payment. FHA loans require 3.5 % of the purchase price and conventional loans require 5 %-20% down payment. There are special conventional programs that offer no down payment as well!
How much money will I need for closing costs for my new home? Closing costs can range from 2-6% of the purchase price. Since 2011 will be a buyer’s market for real estate, you should be able to negotiate that the sellers pay most, if not all of your closing costs! That’s right; to meet your 2011 New Year’s Resolution of buying a home you may not need to pay closing costs!
What are some other costs associated with buying a new home? Typically you will have to pay for an appraisal. Appraisal costs for a single family home will range from $350-$475. You may want to pay for home inspections and the cost for those will range from $300- $500. You must also buy home owner’s insurance to meet your 2011 New Year’s Resolution of buying a home. Contact your auto insurance agent and 2-3 other local agents for a quote!
Once you understand the costs associated with buying a new home—it’s time to create your own personal action plan to meet those initial costs and expenses. We’ll discuss creating this action plan next post!
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