Costs of Owning

How much money do I need to buy a house?

Of course, the mortgage will be your biggest long-term cost. But don’t forget about legal costs. Your closing costs will include some of those fees, but make sure you’re not forgetting about things like taxes and insurance.

1. Mortgage: A mortgage is a loan to help you pay for the house. You then pay the lender back over time with interest. You pay a little bit to the lender every month for the life of the loan, or until you refinance with a different loan. Use the Beehive Mortgage Coach to learn more and pick the right product for you.
2. Earnest Money: This is the money you pay with your offer on the house. Earnest money shows that you are very serious about buying the home.
3. Down Payment: This is a percent of the price of your house. You pay this money when you decide to buy the home. In some cases, this is the same as earnest money, and proves that you are really going to buy the house.
4. Closing Costs and Escrow: Before the house is yours, you’ll have to go through closing, or settlement. You can negotiate closing costs so you and the seller each pay some. Talk to your escrow officer or a lawyer about these fees. Closing costs include legal fees and documents like credit reports, inspections, taxes, points and appraisal. Escrow is a way to do real estate transactions between buyers and sellers so that every one is treated fairly. The escrow officer is someone who is responsible for handling the paperwork and the legal process. An escrow account is optional, but it’s a good way to protect yourself.
5. Property Taxes: This is money you pay to your local government to pay for public services like tap water, schools and roads. Get an assessment before buying your home, since the seller won’t always tell you the real cost. This can also help you decide if you should make a counter offer.
6. Utilities: Owning a home means setting up and paying for your own utilities like electricity, gas and water.