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What Does It Really Take To Buy A Home

Purchasing a new home is always a fun adventure for wannabe homeowners, but what does it really take to buy a home. And that takes knowing how much monies you’ll need, securing a good interest rate, selecting the best lender, choosing a home inspector and knowing the costs for due diligence and home inspection.

The Costs are More than a Down Payment

How much of a down payment depends on the mortgage lender. Mortgage lenders generally require from 5 to 10 percent down. And VA loans may cost as little as 3.5 percent down. However, if you want to avoid paying private mortgage insurance, you’ll need to reach deep for a 20 percent down payment.

Many folks focus on how much they will need for a down payment, but there’s more to the financial picture than just the down payment. Closing costs, escrow for real estate taxes, utility adjustments and required cash reserves by the lender are required. On average, closing costs add up to 3 percent of the loan amount. For example, the closing costs on a $200,000 mortgage can add up to $6,000. Keep in mind that you can negotiate the closing costs with your lender.

Most lenders require one to two year of real estate taxes in escrow and the prepaid expense of one year the cost for a homeowner insurance policy. Factor in cost adjustments for things like the oil tank and homeowner association fees. Cash reserves required by lender typically up to two months of the mortgage payment. And the lender will want to check those cash reserves. Cash reserves can be kept in checking accounts, savings accounts and money market funds.

Due Diligence

Of course, you’ll want to know the status of the home’s structure, insulation, electric system, plumbing system, HVAC and insulation. Part of due diligence is investing in a home inspection report. Turn to Keith Knight of A Close Look Home Inspections. Keith Knight is a certified inspector with experience and a keen attention to detail. Learn all about your home’s condition with A Close Look Home Inspections. You’ll get all the data needed in order to make an informed decision. After all, you don’t want any unexpected surprises after you move in.

Buying a home is likely the most expensive investment that you’ll make in your lifetime. Knowing how much you really need and investing in a home inspection report will help you achieve that American dream.

Contact On Point Carolinas Realty

As a home buyer, you should weigh you options.  Contact us at On Point Carolinas Realty for help getting started on you home buying journey.

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About The Author
Gus Testa

Gus Testa, Top Realtor with On Point Carolinas Realty, LLC, has been in real estate sales and management since 1977. In 1993, after leaving family, friends and his owned real estate franchise firm behind, he and his wife Beth made the decision to “head South” with their 2 sons. Since that time there has been no looking back. Gus immediately began working for a local and well respected new home builder, building beautiful neighborhoods in and around the Charlotte area. In his first year of new home sales he was awarded “Rookie of the Year” for the highest volume of sales for the company. Then in 2002, it was time to move on and Gus joined major developer Crescent Resources as one of their Residential Sales Associates. From 2002 through 2012, Gus along with his business partner Kim McBee, continually sold several million dollars in volume and became very familiar with the movers and shakers in the Real Estate industry in and around the Lake Norman area, the Charlotte area and the Northern most portions of South Carolina. In 2013 Gus and Kim partnered with a local developer to open On Point Carolinas Realty, LLC; a full service real estate company, listing and selling new and re-sale homes and home sites. Gus holds licenses in both North and South Carolina.


  1. […] when purchasing, don’t forget about the closing costs and the down payment to add to the budget. So, you not only have to plan for the actual purchase, […]

  2. […] afford and could save you money on your down payment or private mortgage insurance (PMI). Buying a home for the first time is easier if you do some legwork before you start […]

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