Besides my down payment, how much money do I need to buy a house in Denver now? This is a great question, especially for a first time buyer to ask. The answer is, not as much as you think. On average, most buyers are going to be looking at 3.5% of the purchase price for down payment. That is a set in stone number you can anticipate up front, but what about other costs that pop up. Below is a break down of the majority of expenses first time buyers can expect when buying. Of course, these can change, but this is a pretty standard estimate.
1) Earnest money.Typically 1 to 2% of the purchase price. This moneyis due when the contract is accepted and will be held by a third party. It is refundable if the home doesn't pass inspection, appraisal, or loan conditions. It is applied to downpayment or closing costs at closing.
2) Inspection. $200-400. This is paid out of pocket by the buyer at the time of the inspection.
3) Appraisal. $400. This is paid by buyer after the inspection is completed all inspection items are agreed upon by buyer and seller.Depending on the lender, may be possible toroll the expenseinto closing costs.
4) Closing costs. 2-3% of the purchase price. This covers lender charges, prepaid items like prepaid insurance, HOA's, taxes, etc., closing fees, title insurance and more. This is due at time of closing andit is oftennegotiated to have the seller pay these costs forthe buyerat closing, resulting inless out of pocket expense for the buyer.
5) Down payment. 3.5% or more. This has to be paid bythe buyerand is due at time of closing. Buyer may be able toreceive this as a gift as well.
6) Commission. The seller paysthe commission for all agents involved.Buy using a buyers agentthe buyerdoesn't pay a dime andreceives professional representation through the biggest purchase they will ever make.
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