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Down Payment and Closing Costs
These terms refer to how much money the buyer will have to pay out of pocket and up-front to purchase a home. Down payment is simple; it refers to the amount of money the buyers needs to invest at closing toward the price of the home. Most lenders request a down payment of at least 20 percent of the cost. For first-time homebuyers, this may be difficult to achieve. Several programs are available and relatively easy to qualify for that allow buyers to make down payments of as little as 3 percent of the price of the home. Consumers can evaluate their options with their lender.
Closing costs vary from state-to-state, city-to-city and even from home-to-home. Closing costs can include attorney fees, home inspection costs, title search fees, bank fees, termite inspection fees and radon inspection fees, to name a few. The mortgage lender requires some of these services and others are legally necessary depending on where the buyer lives. To better understand the necessary closing costs in the area they are looking to buy in, consumers can contact their local Eddleston Gill & Co. office. For the sake of estimating, closing costs can range from 1 to 5 percent or more of the value of the home.
While up-front costs are more than one would pay for renting, homeownership can still be a sound investment and certainly an emotionally rewarding experience. After all, a cozy home and a piece of land to call your own are as much a part of the American landscape as Will Rogers is.
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