Understanding The Costs Of Buying A House

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Understanding The Costs Of Buying A House

When you decide that now is the right time to buy your first home, you might want to also take the time to research the costs of buying and owning a house. A great way to do this is by hiring a real estate agent to assist you with the home-buying process. Your agent will do a plethora of things for you, and one thing is to help you understand the costs you may have when purchasing a home.

You Do Not Pay a Commission

The first thing your agent might talk to you about is that you will not pay a commission to buy a home. The seller pays the commission, so your real estate agent's services are free to you. This news is good news for buyers.

You Need a Down Payment

Your agent might talk to you about your down payment amount, as this is a major cost of buying a house. The lender you get your loan from will tell you the amount you need for this purpose. You can work out these details with your lender, but your agent might still discuss this with you. Down payments are often based on a percentage of a home's purchase price. If you have questions about how much this would be for a specific house, ask your agent.

You Pay the Closing Costs

While you can work out a deal that involves the seller paying some of your closing costs, you will still have some to pay. You can discuss this issue with your lender and real estate agent. They can both give you an idea about the total costs, and you can also learn more about your options for paying these costs. For example, you can ask the seller to pay some. You can also pay some of the costs out of your pocket or roll them into your loan.

You Need Insurance to Close

Additionally, your agent will talk to you about the necessity of homeowner's insurance for closing. Your lender might also discuss this issue with you. Homeowner's insurance protects the house you buy and your investment in it, and you cannot skip this requirement. You will likely need to pay for one year of coverage upfront, and you must pay this before closing.

You will also have costs after moving in and moving costs, so you might want to add these in, too. If you have questions about the costs of buying a house, talk to a real estate agent.

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In Real Estate, It Pays to Have a Plan Real estate purchases are big purchases. You may pay several hundred thousand dollars, or even more, for a property. As such, there's not a lot of room for error. If you buy a house that needs a lot of unexpected work or end up in over your head when it comes to the mortgage, your dream home can quickly turn into a nightmare house. We want to help you avoid scenarios like that, which is why we share so much information about real estate on this blog. Our readers emerge more informed on a wide array of topics, from buying to closing.