Expenses to Save For

Down Payment.  A generation ago the traditional down-payment was 20%; so on a $100,000 house you would have needed to come up with $20,000.  That size of down-payment is usually out-of-reach for most first-time home buyers.  In today’s market there are many loan programs that offer a 3% down payment ($3,000 on a $100,000 home) or even no down payment.  Remember, although you can find programs for 0% down; the more money you use for a down payment, the less your payment will be.  

Earnest Money. You will need to provide a check for your earnest money deposit when writing your offer.  This deposit shows the sellers you are “earnestly” intending to purchase the property and is usually between $500—$2,000.  Since most first time homebuyers are buying a home under $200,000, you can usually safely estimate at the lower end ($500).  This check will be deposited into an escrow account upon final acceptance of the contract.  These funds are applied to the your closing costs on closing day.  

Inspections.  Generally you will have to pay for your building inspection ($200—$400), termite inspection ($45—$90)and any other inspections you chose to have performed up-front.  Occasionally there are inspectors that will allow you to pay for the inspection

Closing Costs.  Closing costs are due at the time you close on a home and are approximately 2% of the total sales price.  ($2,000 on a $100,000 home).  There may be times when, as part of your offer, you request the seller to pay all or a portion of your closing costs. Whenever you ask for incentives such as these, you will probably find the seller less willing to negotiate on price. After all, what you are really asking for is have the seller to give you some money to help you buy their house. The end result is that, for a little relief in the beginning, you are willing to pay a little more in the long run.

Moving Expenses.  Don’t forget to consider moving expenses which may include packing materials, a moving truck, and travel expenses if your move is a long distance move.


The Rushing Team


 314.706.9663  or  636.578.7253