Buying a home costs money, but there are many ways to reduce that cost and we’ve had many clients get into a home with a net cost of ZERO at closing. Today, we’ll break it down to help you understand if you may be able to buy a home with little to nothing out of pocket.
When you contract to buy a home, the seller wants to know that you are serious about closing on that home. Whether it’s a new build or a resale home, you are asked to put up earnest money as collateral to show that you intend to close. The amount of the earnest money varies anywhere from $500 up to 1% of the sales price of the home. This is a cost that you will have up front: we can’t avoid this one. However, if things go well with the next steps in the process, you may be able to get a full refund at closing. In other words, on the day that you become the home owner, you may also get a check back!
There are various fees associated with closing on a home including: lender fees, taxes, insurances, title company fees. These fees have to be paid at closing and can vary anywhere from 1.5-3% of the purchase price of the home. When you work with Serious. to buy a new home, we find solutions where the builder will pay most or all of these costs for you. Incentives vary based on builder, location and other factors, but it would be a rare scenario that we can’t get something paid toward your closing costs. In fact, if we can’t, we’ll pay $1000 toward your closing costs out of our pocket!
The down payment is an important one and neither the seller nor our agents at Serious. are able to contribute funds to cover your down payment. There are solutions to this that can help you get the cost covered such as USDA Rural Development loans that is a 0% down payment requirement or bond loans where a private entity has funds available to pay the down payment for you. In reality, we can’t tell you today which program will fit you best: you’ll need to complete a loan application and see which programs you qualify for. As a general rule of thumb, you’ll need to meet credit and income requirements which often include a 640 or higher credit score and often they want you to have income lower than a pre-set annual max. For example, a USDA loan may require a household of 4 to have a household income lower than $99,100 annually in order to qualify.
Over the past 8 years, we’ve helped many people find their next home following our system. We’ve had several clients purchase their home for a total net cost of 0, and other scenarios where they may have had to spend $500 or $1500 to get to closing. Once you’ve closed on a brand new home, you have benefits of high energy efficiency and low utility bills (often under $100 a month!). If you’re renting an older home now, moving into a brand new home is often a no brainer. Interest rates remain very low and your monthly payment with bills included could save you hundreds of dollars a month!
Reach out to us and we can begin discussing what fits your needs best! Just a quick text will get you started on the road to your new home.