The third thing you will need is the down payment. The down payment amount is determined by you and your lender. As you’re interviewing different lenders, you’ll discover what loan programs they have. This amount can range from no money down to 20% down, depending on what your credit situation is and what type of program or rate you want to have.
The fourth thing you will need is an appraisal and home inspection. These are for both you and your lender’s protection. This way, you can ensure the home is in move-in condition and notify the owner of the property of any items that need to be fixed. You’ll need to have the monies for the appraisal, though, because the lender needs to verify that the agreed upon price is valid in the market area and that you’re not overpaying for the home.
The final thing you need is money set aside for your closing costs. Depending on the loan program you choose, your closing costs will range anywhere from 3% and 4% of the purchase price. There are ways you can reduce this amount or shift the closing costs to the seller, but you’ll have to ask your agent about that sooner in the transaction rather than later. If you want seller participation in any closing costs, that needs to be illustrated up front in the initial negotiations.
If you have any questions about this topic, just give me a call or send me an email. I’d be happy to help!