Back
The #1 Question from First-Time Homebuyers
One of the most common questions we hear from first-time homebuyers is “How much money do I need to buy a house?” We’ll break it down for you more easily than breaking down those pesky cardboard boxes on trash night (aka we make it pretty easy).
There are three categories of costs you should know about when planning to buy a home. Let’s start with the down payment.
1. Down Payment
A few different factors come into play when determining the cost of a down payment—your credit score, debt-to-income ratio, and your first-time homebuyer eligibility.
In many cases, the minimum down payment will be: 0%, 3%, 3.5% or 5% of the purchase price (depending on program eligibility).
Easy peasy.
2. Closing Fees 
Next up are closing fees. There are several different types of closing fees. Let’s break down each one.
- “Origination Charges” are typically a processing fee of $535 and an underwriting fee of $725. (These are the heavy hitters.)
- “Services You Cannot Shop For” include the appraisal fee ($375), credit report fee ($78), flood determination fee ($13), and fraud report fee ($16). No need to open your calculator app—these example fees add up to $482.
- “Services You Can Shop For” typically include the abstracting and title search ($75), lender’s title policy ($175), and title examination ($195), adding up to $445. Hey, the totals are getting lower!
- “Taxes and Other Government Fees” typically include the recording fees, which are generally $145.
3. Prepaids 
Prepaids are the funds you need to set aside in an escrow account to pay for property taxes and your homeowner’s insurance premium, once those both come due. Your future self will thank you!
The costs of these fees are based on the home’s value and your specific homeowner’s insurance policy.
Psst… Don’t Forget About Credits!
One last thing that can factor into your total cost: credits. A tax proration credit and seller-paid credit are the most common types, and they can lower the overall cost of the transaction! A great Mortgage Loan Officer (MLO) can help you get the most bang for your buck when it comes to credits.
Mortgage Loan Officers
Buying a house can be an exciting but sometimes overwhelming experience. To avoid any surprises, always talk to your trusted Mortgage Loan Officer. “Officer” may sound a little intense but really, MLOs are your best friend when it comes to buying a house. They’ll help you navigate the world of homebuying and throw you a life vest in times of trouble!
Need a Mortgage Loan Officer? Hit up one of Community Choice’s MLOs, who will make all your homebuying needs easy and UNcomplicated!