How Much Money Will I Need?

Every contract is different and has its own requirements agreed upon by both parties (Buyer and Seller).  Normally, the buyer has to pay for the following items:

Earnest Money - This amount varies depending on what is customary in your area. In Savannah, Ga the customary amount is 1% of the offer price . This is paid at or shortly after contract binding (both parties have signed and notified of agreement). Typically within 3-5 days of binding.

Home inspection - This inspection is optional but HIGHLY recommended.  It can be accomplished by anyone. If you hire a certified inspection expect to pay $300 - $500 depending on house size and foundation type. You should get a detailed report identifying issues with recommendations.  A good certified inspector will have an extensive checklist and specialized training to look for issues the average person would not think about.

Termite Clearance Letter - If you borrow against the property, your lender will require proof that the property is frees of termite infestation and any past infestation has been adequately repaired. This varies with pest control companies but should cost between $50 - $150.  Your contract can require the Seller to provide this letter at no cost to you.

Downpayment - The downpayment will largely depend on which type of loan you choose to obtain. Minimum amounts are shown below under "How Much Money Can I Borrow?"

Closing Costs - Most of the closing cost can be paid by the Seller according to contract specifics determined during contract negotiations. Closing costs will include, but not limited to, attorney fees, title search, title insurance, court filing fees, 6 -12 months escrow for taxes and home insurance.....

How Much Money Can I Borrow?

The answer to this question depends on your credit score, debt to income ratio, housing to income ratio, price of the house, negotiated contract details (i.e.. closing cost), loan type, and mortgage incentives/programs. Only a loan officer can determine what loans you qualify for and how much can be borrowed and which programs apply to you. Meeting with a loan officer is one of the first steps to buying a house.

So what loan options are available?  Below is some general information for the major loan types including a source for more detailed information.

Conventional loan - Down payment as low as 3% for first time buyers, otherwise 5% - 20%. A 20% down payment eliminates private mortgage insurance (PMI). Typically 620 FICO

https://www.rocketmortgage.com/learn/conventional-mortgage

Government Loan Programs

FHA Loan – 3.5% down payment, 580 FICO

https://www.home.loans/fha-loans

VA Loan – 0% down payment, FICO depends on lender, Typically 620

https://www.va.gov/housing-assistance/home-loans/loan-types/purchaseloan/ 

USDA Loan – 0% down payment, typically 640 FICO

https://www.rd.usda.gov/programs-services/single-family-housing-directhome-loans