Everyone knows buying a home is a major investment. However, its an investment that comes with a massive pay-off. Mainly in the quickly built equity. Though ever wonder just how much you really need upfront for closing costs? Read these tips from Movement’s very own loan officers on this.
Q: How much do I need to save for closing costs?
A: “Generally speaking, you would need to have anywhere from 3-5% of the purchase price of the home saved for closing costs and prepaids (which include your first year of homeowners insurance and setting up your escrow account). I also always recommend to have enough funds saved for 2 home inspections ($300-$400 each) and your appraisal (around $500). There are programs that offer down payment and closing costs assistance to qualified buyers, so be sure to ask if you qualify for one of these.”
– Christina Lane, Sr. Mortgage Loan officer, Chattanooga TN
“It depends! Different types of loans have different closing costs. Some of those are financed into the loan amount some are not. You also have to consider that you will be required to pay prepaid interest for the remainder of the month you closed in, a year of homeowners insurance up front and contribute enough to your escrow account to make sure taxes can be paid when they are due. The month you close in and the day of the month you close in can also change the closing costs by thousands of dollars. If I had to give an estimate, I would say for a $100-$200 thousand house you should save about 2-3 percent. For a house more in the $300-$400 thousand range, save about 2 to 2.75 percent and a house over $400 thousand about 2 to 2.5 percent.”
– Michael Borella, Sales Manager, Knoxville, TN
“With many states offering down payment assistance programs, you could qualify with little to no savings. I have been able to help numerous borrowers who thought they would not be able to qualify for years. A Movement loan officer can also help you find a great real estate agent who will help you negotiate the best offer.”
– Rocky Romano, Loan Officer, Fort Mill, SC.