When you want to invest in real estate, it is time to develop a budget and pattern of fiscal responsibility. One of the most important decisions you must make is about where you will get the cash that will transform you from paying rent to becoming a home owner. Getting properties for sale is not a real issue these days. Most new home buyers always hope they will find a home loan that requires zero down payments or a seller who won’t mind paying the related closing costs, the truth is that you will need some small amount of cash when you are planning to buy a house.
What you need to buy a house
When you are paying rent for the first time, the renter will basically require your first month’s rent and a security deposit and nothing more; the process of buying a house will need a little more money.
Earnest money deposit: This refers to some small percentage of the money that shows that seller you are serious about your offer. This amount is determined by among other things the amount of down payment, the value of the house, local market customs and conditions. Real estate agents advice that when you are planning to make a down payment of about 5%, your earnest money deposit should be something like 1%.
Down payment: As a buyer you are expected to make a down payment of close to 3.5% when you are getting a government insured loan and between 5% and 10% when you are getting a conventional loan. Most mortgage providers expect that at least 5% of the amount required comes from your pocket.
Closing costs: You should budget between 3% and 6% of the value of the house to take care of closing costs because in most cases they depend on your particular loan program or location.
Cash reserves: Depending on your location, there are real estate agents who advice that you have at least two or three months worth of your expected mortgage repayments. However, for your own good, you need an emergency fund to cover at least 3 to 6 months of the amount even after you have finished the buying process.
Moving costs: Once you have finished the entire buying process, it doesn’t matter whether you will be moving locally or travelling a long distance. The truth is that you will need some funds to facilitate your moving as well as monies that are associated with the process of settling into your new home. If you don’t have sufficient money for all these processes, you need to start preparing before your search properties for sale.
About the author:
Purchasing a home is not an easy task and if you happen to be looking to buy homes for sale . We are Resident Realty, the expert real estate agent when it comes to properties for sale . Whether you are searching for homes for sale or you want to sell your property, we are here for you.
Our thorough research and up-to-date information about our properties for sale leave no room for doubt. You can be assured you are looking at only genuine deals when you do business with us.