Zero down home loans? No down payments? It can almost seem too good to be true and even though it does sound like a great way to save money, it doesn’t mean that you can buy a house without one penny in the bank. There are a lot of expenses when it comes to buying a house and if you are not prepared, it can be a very stressful transaction. While there are no down payment options that may be eligible for some, it does mean you’ll be paying in other ways, either with higher interest rates or mortgage insurance. However, it still can be a good option for many potential homebuyers as long as they know that there are other expenses involved.
Don’t forget about moving expenses. Moving can be expensive depending on how you are moving and how far away you are moving from your current residence. Do you need to rent a moving van? Hire movers? Buy boxes? And then there’s the gas getting to and from your new home.
Closing costs. Many of these zero down home loans can include closing costs but you want to make sure that you have enough to cover even if your agent increases the cost of the home to cover those closing costs. Closing costs include the commission to the real estate agent, closing attorneys, courthouse fees, homeowners insurance, title insurance, appraisal fees and fees that go to the mortgage lender.
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Home inspections. It is vital to have a home inspection anytime you purchase a property. Even if you are confident there is nothing wrong with the home, only a home inspector will be able to look at places that you can’t see with the naked eye. They will check for pests, termites, insulation, and structural integrity of the property. If there is something that needs to be repaired or replaced you have to consider either asking the seller to provide the repairs or adding it to your to-do list once you move in.
The cost of homeownership. If you’ve rented for several years or maybe forever, you may not understand all the maintenance that comes with homeownership. While it can instill a sense of stability and pride, you are now responsible if your washing machine goes out, the plumbing leaks, you need to repair something or your heating system fails. It’s always good to have some emergency funds in the bank just in case.
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Buying a home with a zero down home alone sounds like a great idea but it’s important to understand all the other costs involved. If you’d like more details or more information or simply have a question about real estate contact our office today.