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Buying a Home? Know What It Really Costs

Written by Steve Cook on July 17, 2014 in Real Estate  |   No comments

You’ve done all the right prep work to buy a home. You saved for a down payment, cleaned up your credit, and got pre-approved for a mortgage. You found a home that you can afford, and now the days are ticking down to closing—and everything…

buying-a-home-know-what-it-really-costs

You’ve done all the right prep work to buy a home. You saved for a down payment, cleaned up your credit, and got pre-approved for a mortgage. You found a home that you can afford, and now the days are ticking down to closing—and everything seems too good to be true.

Unfortunately, it could be. Unless you are prepared for some serious expenses, you may not make it across the threshold and into the home of your dreams.

The real costs of buying a home

If you’re buying a home, be prepared to write some really big checks. In addition to your down payment—which, for buyers with average credit, could be 20 percent or more of the sale price of the home—you’ll need to pay some other hefty expenses, including:

Closing costs. Many real estate agents tell their clients that they should expect to pay closing costs equivalent to 5 percent of the cost of the home, which is a good ballpark number. However, closing costs can vary greatly depending on where you live. They tend to be higher in states like Hawaii, California, and New York, and they are usually lower in Midwestern and Southern states.

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