Money Matters First

Understanding the financial requirements for purchasing a home will allow you to be prepared for a successful closing on your new home. Talking with a Lender and your Realtor about these costs will assure that you are not caught by surprise as you move through the various processes.  Be clear about your out of pocket expenses before you begin looking. Here are the most common costs associated with purchasing a home.

Earnest Money

The more you put down as Earnest Money, the more powerful and serious your offer will appear in the eyes of the Seller.

When you find the right home and decide to make a written offer, you will be asked to write a check or hand over cash as Earnest Money.  According to current Purchase and Sale Agreements in this area (check your area, it may be different) you will be required to deliver your Earnest money within 2 days of mutual acceptance between the Buyer and the Seller.


Home Inspection

Within 10 days after mutual acceptance of your written offer, you will need $250-$375+ to hire a Home Inspector to inspect the home you will purchase.  This money will be required at the time of Inspection.

The home inspection money, paid at the time of the inspection is not money that will be returned if you do not close on the home.  Because of this, make sure that this is the home you plan to purchase.



$400-$550 depending on the lender and size of property and kind of property.  Check with your lender as to the actual amount required in your loan package.  All  lenders require an appraisal of the property.

Your lender may collect this money up front or may roll it into the final figures of the loan package selected for you.  Be sure to ask your lender when you might need this amount of money.


Down Payment

Other than a VA loan, you may be required to put down at least 3.5% of the purchase price.  Check with lender as to what your loan package requires.  Some down payments could be 20%.

The Down Payment is a percentage of the loan amount.  Unless you are paying cash for your new home, FHA, Conventional and VA loans all require a different amount.  This money will be needed at the signing of the documents at the Title company when you are ready to close. 

Keep in mind that your Earnest Money will become part of your down payment. (I.e. down payment amount minus your Earnest Money will be what you need to bring at closing)