The Cost to Buy a House in Western Washington
There is nothing more rewarding than owning your own home. While there are perks to renting, many renters feel they are unable to put their own touches onto the homes, as they in reality, aren’t their own. When purchasing a home you have the freedom to improve, remodel, decorate and landscape to your exact needs and preferences without feeling as if you are “wasting” your hard earned money. When owning a home all the funds you put into the house you will also be able to reap their benefits making for a very rewarding experience.
Purchasing a house is no easy task and more likely than not, requires a real estate professional who is knowledgeable in the home buying process. By hiring an experienced agent you will be able to feel more confident in the home buying process and much of the stress will be alleviated from your shoulders. A common question among homebuyers is what to expect once you’ve found the home of your dreams. What fees and additional costs will be required of you? It is important to make sure you have the needed funds in your bank account and ready to go before you start house hunting. The last thing you want to do is find a house that you fall in love with and end up being unable to purchase the home due to funds.
The most common expense that you hear of is closing costs. In Washington State the closing costs on a home can range from 1-3% of the purchase price. When you apply for your loan you will receive a Loan Estimate that will give you a rough idea of what your closing costs could be so that you have a more definitive number to go off of before your finalized sale. There are many different things that are included in closing costs such as title insurance fees, recording charges, document preparation fees, etc. One thing to always keep in mind regarding closing costs is that they are negotiable. Discuss the options that are available to you with your real estate agent and you may be able to split the cost with they seller or in some cases, they may pay the closing costs completely. It is a case-to-case basis and ultimately the amount paid by each party is agreed upon.
The next chunk of change that will be due is your down payment. The amount you put down on your home will also depend on the loan you are approved for, but generally you are required to put down 3%-20% of the purchase price. If you are approved for a VA loan, at that point you could be eligible or 100% financing and avoid any down payments whatsoever. One of the more popular loan programs is the FHA home loan; in this case you are required to put down 3.5%.
Another common fee/cost to be aware of is your home inspection and/or appraisal. In some cases the seller will conduct the appraisal as they will want, and sometimes be required, to have an accurate evaluation of their homes value. Appraisal fees range from $300-400 and can be completed in a few hours. An appraisal and an inspection are two separate inspections and will each be paid separately as well. When purchasing a home it is highly recommended and even required for some loans that an inspection be conducted. An inspection will cost you anywhere from $315-400 roughly pending on the size of your potential home. Again, this will last a few hours and give you a full report of any and all things in the house that need repair or replacement.
In conclusion, a few of the most important costs to be aware of when purchasing a home include the down payment, inspection fee, appraisal fee, and the closing costs. While each loan is unique and different, these costs are nearly always included in the sale of a home and are more often than not, the buyer’s responsibility. If you are ready to purchase a home, sit down with a financial advisor and a real estate agent to begin the process by getting pre-approved for your loan and let your search begin.
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