The first number you should have in your head when you are thinking about buying a home is that you will need a minimum 3.5% for a down payment (unless you are buying in a rural area, if this is the case call me, we’ll talk).   Buying a $100,000 house, you’ll need $3500.   If you do not personally have this money you are allowed to receive a gift from a family member for the down payment.  This must be a gift though, no paying it back.

Next we need to talk about closing costs.  Closing costs are the costs associated with getting a mortgage.  A great mortgage professional can spell out all of these costs for you before you even start looking.  Need a referral? Ask me, I know a guy.  While a down payment needs to be your own money or a gift from a relative, you can ask the seller to pay for your closing costs.  There may still be some fees that you will still have to pay so it is good to plan for a little cushion when saving your down payment.

Once you identify a property that you want to make an offer on, you will need to put down what is called earnest money.  Earnest money is required to make a contract valid  and it shows that you as a buyer are serious about purchasing a home and you are willing to put a little skin in the game.  While there is no set figure that you must give, generally $1000 is a good amount on properties under $200,000.  This earnest money is held in a trust account by the listing broker until the house closes.  At closing, typically you deduct your earnest money from your down payment.  Example, you need $3500 for your down payment, but you already put down $1000 in earnest money.  On closing day you would bring just $2500 do the closing table.

Lastly,  when you move in you are going to want to paint, decorate, landscape, and so on and so forth.  Make sure that buying a house doesn’t completely wipe all your savings out.  Nobody wants to be house broke.