The buyer's upfront money is the initial out of pocket costs which are collected prior to closing and typically immediately after going under contract on a property. The buyer's closing costs and down payment are costs that are due at the time of closing on your property. Buyer's can negotiate the seller to pay all or a portion of their closing costs. There are also down payment assistance programs available to assist buyer's with their down payment and closing costs if the buyer meets the criteria for the program.
Below is a chart detailing the costs to purchase a home...
Upfront Cost | Closing Cost | Down Payment |
Upfront costs are your actual out of pocket expenses which you will need prior to purchasing your home. | Closing costs are the costs associated with securing your loan. These are paid at closing and are separate from your down payment. Closing cost typically amount to 3% of purchase price | Down Payment is the money due at closing and serves as the initial upfront portion of the total amount due. The rest is secured by the loan. |
Credit Report $15-$20 This is typically charged upfront by your lender. | Loan Origination 1-2% of purchase price This is the fee charged by your lender to pay for his/her services. | FHA Down Payment 3.5% of purchase price.
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Earnest Money Typically 1% of purchase price. The earnest money is due at the time you write the offer. It goes towards the purchase of the home. The Seller offers what they’d like to receive as earnest money. It is negotiable in many cases. If the buyer defaults on the contract, this becomes the Seller’s remedy. | Processing Fee $400-$600 This is charged by your lender and pays the person who processes your loan file. | Conventional Down Payment 3-20% of purchase price |
Home Inspection $175-$350 (can be higher for larger homes) Radon Test $100-$150 Mold Test $250 & up Meth Test price varies These are upfront fees paid to the 3rd party professionals who conduct the test. They require payment the day of service. | Escrows Escrows are items that are held at closing to fund specific accounts throughout the year. Generally 15 months hazard insurance and 3 months taxes are held at closing and placed in your mortgage escrow account. | VA Down Payment $0 VA loans are 100% financed by the lender. |
Appraisal 375-$425 (can $ be higher for larger homes) This is charged by your lender but is considered a closing cost paid closing day (some lenders charge this upfront). | Other fees issued as closing costs: Surveys Lender’s title policy Recording Fees Mortgage Insurance Title Searches Other costs assessed at settlement | Down Payment Assistance Programs There are down payment assistance programs that can assist qualified buyers with all or a portion of their down payment and closing costs. |