How Much Cash Do I Need?
Most house buying expenses are paid at closing, meaning it does not take out of pocket cash to pay for them during the process.However, some cash is needed during the process and it’s best to know how much you will need up front.
Earnest money - The amount of earnest money is negotiable, and varies in proportion with the sales price. $500 is a very common amount for a home under $175,000. The good thing about earnest money is that in most cases, it goes towards reducing your closing costs or is returned to you at closing.
Inspections - The most common and basic inspection is the general “home inspection” and averages about $300. Other inspections available are heat/air, radon gas, roof, lead, and mold. These inspections vary in price and I can help you find specific inspectors if you desire.
Appraisal - Most mortgage lenders require you pay for the appraisal outside of the closing costs you pay at closing. This typically costs around $350. However, some mortgage lenders will allow for you to pay for the appraisal at closing (not upfront) as part of your closing costs. This can greatly help out if you are short on cash!
Typical upfront cash needed for a First Time Homebuyer
| Earnest Money | $300-500 |
| Inspections | $250-300 |
| Appraisal | $350 |
| Total Cash |
$900-1150 |