This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-6115 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: What do I have to pay for when buying a home?
Answer: If you are considering purchasing your first home, you will likely be obtaining a mortgage to pay for it. This means that you are not going to be paying the full amount of the sales price at the time of closing. Instead, it will be financed over time. How much do you actually have to pay at closing though? And what other fees will you have to pay for?
Closing Costs — in some markets, buyers can ask sellers for closing costs. However, when deciding how much purchasing power you have, you should count on paying for closing costs yourself. Closing costs incorporate things such as an appraisal fee, lender costs, title insurances, and funds to start an escrow account with your mortgage lender for future taxes and insurance. It also includes your first mortgage payment, meaning that you will not owe your first monthly payment until the month after settlement.
All the fees listed above will add up to approximately 2-3% of the total sales price of your new home.
Another thing to budget for is a home inspection. Depending on the size of the home, it can range from about $350-$750 for most first-time buyers. This will typically be due at the time of the inspection. Of course, an inspection might also bring up some repairs that must be done. Sometimes, it is possible to negotiate with the seller to have them pay for, or complete, the work recommended by the inspector.
However, all homes need regular maintenance and upkeep so all new homeowners should be advised to budget for repairs — either right away, or further on down the road.
The last thing you need to save for is probably the most obvious — the actual down payment for the mortgage. This amount can vary from person to person but can range anywhere from 5-20%. Your lender can help you to decide the best amount for you to put down.
It’s always a great idea to get everything in writing, to include a complete list of closing costs and what your monthly payment would be based on those various loan options.
In addition to helping you find a great home, your Realtor can help you with referrals to trusted local mortgage lenders. And the good news is that the commission fees for your Realtor are paid by the seller and will not be part of your closing costs.
For more information and a personal consultation on the buying process, don’t hesitate to reach out.
Hope Peele is a licensed real estate agent with McEnearney Associates, Inc. in Alexandria, Virginia. She grew up in Old Town and currently lives in Del Ray. As a partner with The Peele Group, Hope is dedicated to guiding her clients successfully through the many faceted process of buying or selling a home. Contact Hope at 703-244-6115.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria
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