How Much Does It Cost To Buy A House?

Are you thinking of buying a house but aren’t sure what it’s going to really cost you? In this video, I’m going to walk you through buyer closings costs so you know exactly what to expect when you purchase a property north or south of the border. We’ll go over specific fees so you can budget in advance, be better prepared, and have fewer last-minute surprises.

The Down Payment

Buying a house is very exciting, but there are a variety of closing costs associated with your purchase. The good deals go fast, and you should be ready to act once you find a good opportunity. Part of being ready is understanding everything, including having a baseline for what to budget on closing costs.

The first out-of-pocket closing cost is going to be the money for your down payment. Now, this really isn't a closing cost because you're putting it towards the house. However, it will leave your bank account, so it’s wise to start speaking to a lender early in the process. This will help you get a really good idea of what kind of financing you are going to get.

Once you know this figure, you will know what amount of downpayment you're going to need. Again, because this is going to be the largest out-of-pocket expense, knowing this upfront is crucial.

Transactional Costs

Now that we got the down payment out of the way, let's go into the actual transactional costs for purchasing a house. These are the costs of doing business when you buy a house in and around Janesville or in and around Rockford.

One line item that you'll see on your closing disclosure is for your title and escrow fees. Escrow is a neutral third party that acts on behalf of the buyer and the seller. They hold on to all of the monies and transfer the monies within the transaction. You will close with the escrow company, but your title is insured by a title company.

The next cost you'll see is miscellaneous loan fees from your lender. Your lender’s closing costs will differ based upon who you use to finance your property. Overall, the cost should be around 1%  to 2% of the amount that you're borrowing. You need to pay for appraisal processing fees, credit reports, and other miscellaneous fees.

Another cost that you'll assume shortly after you get an accepted contract on a property to purchase is the home inspection fee. When we made an offer on the property, we did not have time to inspect every aspect of the house. That means it’s super important as a buyer that you have the right to go back and inspect it to verify what you're purchasing. The home inspectors that we work with most frequently run roughly between $300 and $400.

Getting Into Your New Home

It’s very important to understand all of these costs ahead of time so that you can be better prepared and budget for them—before you get to closing. I hope this helped give you an idea of your closing costs, though they will ultimately be dependent upon several factors.

If you'd like to get a better idea of what those costs are for you, I would love to help you. I help people just like you buy and invest in real estate every day, and I would be happy to assist you too. Also, if you have any additional questions or want to know about something specific, please feel free to contact me and I’ll be happy to connect.

Don’t forget to subscribe to my channel and for more information on the Wisconsin Illinois border in and around Janesville and Rockford. Stay tuned to see what I featured next!