Despite the frequently drawn-out and challenging process, purchasing a new home is nearly always a thrilling journey. The tiny matter of money, though, typically dampens the excitement. Many home purchasers, particularly first-time buyers, just aren’t aware of the true cost of purchasing a home and how much money they’ll need, even if they should be. So continue reading to find out how much cash you’ll need to buy a home in York, PA.
Standard Costs of Buying a House
Knowing the typical costs you’ll incur might help you better estimate how much money you’ll need to buy a home in York, PA. Here is an explanation of typical costs:
Down Payment
“An upfront cash payment made by a home buyer in a real estate transaction is known as a down payment. Although mortgage lenders historically demanded a 20% down payment, this is no longer the case. Instead, the down payment is a proportion of the home’s purchase price. The typical down payment is actually significantly lower. Today, you can get a mortgage for as little as 3% down. A 20% down payment isn’t necessarily required, but if you can afford it, there are benefits to making one. A bigger down payment might result in a reduced interest rate and a waiver of the cost of private mortgage insurance (PMI).”
Consult a York, PA agent to learn more about down payment choices and assistance program. Call 717-489-2849 to speak with a knowledgeable representative.
Earnest Money Deposit
The main goal of this deposit is to reassure the vendor that you are a sincere buyer. In essence, once you deposit your earnest money, you become a player.
Typically, 1% to 2% of the home’s purchase price is used as the earnest money deposit. Although not typically needed, these deposits are common and can help you stand out, especially in a competitive market.
Closing Costs
The charges you’ll incur at closing are a substantial expense you’ll experience when you purchase a home in York, PA or anywhere else. Closing expenses range from 2% to 6% of the cost of the home.
Closing costs typically include (but are certainly not limited to). . .
- Appraisal fee
- Title fees
- Mortgage origination fee
- Mortgage application fee
Prepaid Costs
Additionally, “there are instances when you have to pay some bills in advance, like mortgage interest or homeowners insurance or real estate taxes. You will probably be required to make an initial escrow deposit, which your mortgage lender will then put into an account on your behalf. Then, when due, your lender will utilize the funds in the escrow account to cover any property taxes, interest, or insurance payments.
Mortgage Payments
There are also the monthly mortgage payments, which primarily consist of “payments towards your principal balance (the entire amount borrowed for the home loan) and towards interest.” Each payment will also include a portion for taxes and insurance.
Private mortgage insurance may also be included in your mortgage payments if you put less than 20% down. The price of mortgage insurance can increase your monthly mortgage payment by $100 or more depending on your loan type, down payment, credit score, and other factors.
Additional Costs to Consider
When calculating how much money you’ll need to buy a house in York, PA you should also take into account additional expenses that are probably not included in the above list of normal expenditures. These consist of (but are not limited to)…
Moving Costs
Even relocating within the same city can be quite expensive. “A local move typically costs around $2,300, whereas a long-distance move (more than 100 miles) often costs around $4,300.”
HOA Fees
You’ll probably need to pay monthly or yearly homeowners association (HOA) dues if the new property is located in a neighborhood with one.
Home Maintenance/Repairs
Every house needs routine upkeep, and the majority of houses need at least some repairs. According to experts, annual maintenance and repair expenses typically range from 1% to 3% of the purchase price (depending, of course, on age and condition).
Example Breakdown of Costs
Check out this example breakdown of the costs associated with buying a home in York, PA to get a better idea of how much money you’ll need.
Suppose the purchase price of the home is $350,000. Here’s what you’ll be looking at . . .
- 20% down payment – $70,000
- Closing costs – p $7,000 to $17,500
- Moving costs (under 100 miles) – an average of $1,638
- Total – $78,638 to $89,138
However, you may save $52,500 if you’re ready to pay for PMI by putting down a much lower amount—say, let’s $17,500.
Get the Help You Need to Buy a House in York, PA
And the last factor demonstrates how important it is that you collaborate closely with a knowledgeable York, PA agent. You can find strategies to lower the cost when you purchase a home with the aid of a competent local agent. Therefore, make sure to get in touch with us right away at 717-489-2849 if you intend to buy a house in York, PA but are worried about the financial element.