The Real Cost of a Home Purchase

The Atlanta housing market is ripe for buyers, with abundant inventory and some of the lowest home prices in many years. However, before you jump in and buy one of the many homes for sale in Atlanta, it is important to weigh the cost of such a venture. We have a list of some of the expenses to consider before you sign your first home purchase contract.

Down Payment

The first big expense you will be faced with in purchasing a home is the required down payment. Down payment requirements vary based on the type of mortgage loan you choose. Many lenders require a minimum of 20 percent of the purchase price up front before the loan is issued. If you don’t have 20 percent to put down, you may still be able to get a mortgage loan for your dream house. However, you will have mortgage insurance added to your monthly payment, which can cost $100 or more each month.

Closing Fees

Standard closing costs are charged by the lender, and these might include charges for credit reports, appraisals and document filing fees. The title company will also charge a fee to insure the property against prior liens or encumbrances against the home. In addition, many borrowers pay “points” at closing, which is a percentage of the purchase price, to get the mortgage rate they can afford. Closing fees can vary greatly, but average just over $3,000 for a $200,000 mortgage.

Home Inspection

The home inspection is not included with the rest of the closing fees, but it is an essential component to a home purchase if you want peace of mind in knowing that the house you are purchasing is structurally sound. Home inspections are typically performed prior to closing, so that problems can be repaired prior to the purchase. Inspection costs also vary widely, with many paying between $150 and $700 for a full inspection. Fees are usually due at the time the inspection is performed.

Home ownership is a rewarding experience, but it comes with costs. By understanding the various charges you might be facing with your purchase, you can prepare for the expenses that will inevitably arise during the purchase process.