I’ve been getting a lot of questions lately about what it actually costs to buy a home. Obviously it’s going to be a bit different for every person and what their finances look like and what kind of program they look into, but there are so many different options out there whether you’re a first-time home buyer or buying your 3rd home. Buying a home is a significant financial commitment, and understanding the potential costs involved is essential. I decided to break down the costs with these examples below.
1. Scott | The Starter: Scott is a newbie in the home buying game, considering a single-family home that has a market price of $250,000. With a 3% down payment, a 30-year mortgage, and an interest rate of around 7%, Scott’s monthly payment would come to about $1,613 not including property taxes, insurance, and any potential HOA fees, etc.
2. Emily & Brad | The Upgraders: Emily and her husband Brad are expecting a baby and need more room. The home of their dreams carries a price tag of $500,000. With a 10% down payment, a 30-year mortgage, and an interest rate of 5%, their monthly payment would be around $2,684. Incorporating property taxes, insurance, and potential HOA fees, the total monthly expense would be approximately $3,484.
3. Hilary | The Idealist Hilary has discovered her dream property in the perfect neighborhood. This exquisite property is priced at about $1 million. With a 20% down payment, a 30-year mortgage, and an interest rate of 5%, Hilary’s monthly payment would be $4,295. Include property taxes, insurance, and possible HOA fees, and Hilary’s total monthly outlay is estimated at about $5,895.
Using these characters can get a rough idea of what you would be paying at different price points. For accurate prices, interest rates, and monthly expenses, talk with a trusted mortgage advisor and get personalized information.
I hope that these 3 examples gave you a better idea of what it actually costs to buy a home. Like I said, there are programs out there for everyone. Maybe you need to save a little more money for a downpayment, maybe you need to repair your credit for a year before it’s time to get pre-approved. Shoot me a message and we can talk about your goals for buying a home.