That depends on a lot of different things, like the cost of the house and the mortgage rate you get. But in general, you’ll need to have enough money to pay for your earnest money, down payment and closing costs.
Earnest money is the money you put down on a home when you make an offer. It’s a way to show to the seller that you’re serious or “earnest” about wanting to buy their house.
The down payment is a percentage of the home cost you pay directly to the seller. The amount of a down payment can be anywhere between 3% and 20%. So, if you’re buying a $100,000 home, your down payment could be anywhere from $3,000 to $20,000.
Finally, closing costs refer to the costs associated with processing all of the documents related to your home loan, appraisals, etc. Closing costs run around 3% – 5% of the cost of the home and can paid by either the seller or the buyer. They’re paid at the time of “closing,” when you sign all the paperwork that seals the deal.
This is where your Rilio agent will say, “‘We got this’ is not just a slogan.” Knowing how much to offer on a home is just one of the many reasons you want a trusted real estate pro in your corner. Your realtor will help you develop a competitive offer based on things like:
- Comparable home prices in the area
- The overall condition of the home
- How long the home’s been on the market
- How much mortgage is required
- How competitive is the current market
And, of course, how much you really want the home.
Let’s face it. No one likes to be rejected. But when we’re talking real estate offers, rejections are often part of the process. Don’t be discouraged. Your Rilio agent has ninja-level negotiation skills. They may suggest you offer more money in exchange for closing costs, a carpet allowance or specific repairs. The point is, everything is up for negotiation and it’s your realtor’s job to flex their arbitration muscles on your behalf.
Well, it all depends. The biggest challenge with doing this, of course, is potentially overextending yourself. For example, you don’t want to have an offer accepted on a house you want to buy, then not be able to sell your current home. In situations like this, buyers who need to sell their current home will often make a “contingency offer.” Such offers are, like their name implies, contingent upon the sale of their current home and only goes through when they sell their house.
Today, prospective home buyers can look at hundreds of homes online. And, it’s a great thing to do too. Looking at lots of home lets you decide what floor plans you really like and what neighborhood seems to be right for you. When it comes to actually checking out the house in person, however, most people visit around 10 homes before they fall in love. But, just like love itself, everyone’s timeline is a little different. For some, it’s love at first sight, for others “it’s complicated.” Whichever category you fall into, you won’t be going it alone. It’s your realtor’s job to help you wade through the options and know when you’re ready to say “I do.”
Don’t give up hope. You could be a good candidate for one of the federal mortgage programs available for first-time home buyers. The best way to find out is to contact a HUD-funded housing counseling agency to help you sort through your options.
This is actually one of the best questions you can ask, because it means you’re really considering all the aspects of home ownership. And, there are a lot of them. Of course, you’ll want to figure in fixed monthly expenses like utilities, trash collection, and things like cable or wifi. Then, think about fluctuating costs, like a water bill for that green lawn you’ll have or occasional maintenance costs for when your dog chews through the fence. Of course, you’ll have property and possibly city or county taxes. Good thing about the taxes, is that they’re usually rolled into your mortgage payment. Again, your Rilio Agent can help you figure out what additional costs you might run into.
Whether you apply for a loan online or in person, you’ll likely be asked to provide the following information:
- Social security number
- Checking and savings account statements for the last 6 months
- Proof of any assets, like stocks or bonds
- A paycheck stub or evidence of earnings
- A list of credit card accounts and amount owed on each
- Account numbers and balances on car, or any other, loans
- Copies of your last 2 years of income tax statements
- The name and address of someone who can verify your employment
We know, we know. Sounds like a lot. But if you think about it, you’re asking someone to loan you a lot of money. So, spend the time, get the paperwork together and see what loans you qualify for.
There are several places you can go to get a loan. Banks, savings and loans, credit unions, private mortgage companies and even state government lenders offer home financing. Just like any major purchase, however, it pays to shop around and compare offers. Rilio realtors can offer great advice on ways to cut through the clutter or introduce you to loan options in your area.