The Real Estate Avenue: December 2019

      Many times we think we have come across a great deal as soon as we see that (no money down!) flashing across the screen. Wow, this is to good to be true!" So you wait on pins and needles the entire week to run down to the store and get whatever has caught your eye for that week just to be deflated at the register. You saw the flashing lights but failed to see the fine print at the bottom of the screen. I have been that girl more than once because I'm a dreamer by nature and my practical side always seems to be delayed or better yet suppressed.

                When it comes to purchasing a home a lot of first time buyers are told they qualify for down payment assistance and there will be no money down. So imagine their sticker shock when they find out that no money down doesn't mean no money out of pocket. So lets make sure when your ready to purchase you have a good understanding of what you can expect.

   When you begin the process with a lender you may be told that you qualify for down payment assistance. Down payment assistance are funds that a buyer may qualify for to use toward the purchase of a new home. It helps alleviate some of the monetary burdens associated with the home purchase. For instance an FHA home loan normally requires a 3.5% down payment. As an example if you were buying a 100k home your down payment would be $3500.00. The down payment program could be used to cover some or all of that cost. That's normally what your lender is referring to when they says no down payment.

On the flip side there are always other cost associated with a home purchase. Earnest money is one that comes up in almost every transaction. The amount of earnest money varies with each transaction and what has been agreed on. A seller may require $1500.00 to take the home off market while your under contract, as a show of good faith. A builder can typically ask for once percent of the purchase price of the home. It's negotiable but whatever the cost it's not apart of the no money down payment category.

The appraisal is another cost that a home financed through a lending institution will be subject to. Your appraisal could be $650.00 and if the appraiser has to go back out to the property they may charge an additional fee. Lets talk about the home inspection depending on the company you use, the homes sqft and the services they offer the home inspection could start at $350.00. There may also be additional closing cost, last minute charges that have crept up on your credit report and a few other fees that could arise.

I know this has all of a sudden seemed quite daunting. It's not meant to scare you just to make you aware that no money down is different than no money out of pocket. Your lender and realtor will work as a team and help you through the process. You will more than likely have a good understanding of what to expect with the right team in place before you truly begin the process. A good first step is to always set up an initial consultation with your realtor. This way your able to get the facts without the fluff.

If you have questions or are thinking about buying or selling a home and would like to know your options give me a call. As always I appreciate the time you take out of your day to read my blog. If you find this blog helpful please pass it on.