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Reply to "First time home buyer"

I am closing on a home in Idaho on Tuesday so all of this is fresh in my mind!

Some expenses could be:

- Home Inspection: This cost us $250

- Closing Costs: We negotiated the sellers to pay this but they usually run 3-5% of the purchase price. If you look at the CD (Closing Discloser) it will break down all of the costs. From making copies of documents to paying title fees, lender fees, and appraisal, everything is charged. With the loan we used (conventional), we were able to have the sellers pay 3% of the purchase price toward the closing costs which left us $407 extra to pay.

- Earnest Money: When writing an offer, an earnest money check is included which is held in escrow until the purchase goes through. This can be used toward a down payment or closing costs.

- Down Payment: If you pay down payment of 20% of the purchase price, you will not have to pay a monthly Mortgage Insurance. We paid 3% of the purchase price which was required by my loan. We will be paying a monthly mortgage insurance until we reach 22% equity. At that point, the MI will drop automatically. This is specific to our loan.

Be sure to ask your lender about MI and what loan you are using. Most loans, you will have to apply to get the MI dropped. This requires an appraisal and once it is valued at you owning 20%, you can drop it.

- Upgrades: If you need to update anything in the home right away, this is something to consider. The only thing of concern for our home was the broken dishwasher. The sellers agreed to pay us $400 cash out of escrow toward a new dishwasher. This saved us some money. You also want to take into account any appliance purchase. In the state of Idaho, the only required appliance that is included with the purchase of a home would be the oven. You may need to purchase a refrigerator or washer and dryer.

I wish you the best of luck in your home buying search! Be sure to find a great realtor. 

P.S. A trick someone told me was if you know a realtor personally, but they are not in the area, you can have them refer you to a realtor in the area and maybe they will give you their referral bonus toward closing costs. My friend did this with her mom who is a realtor in Colorado.

 

Kirsten

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