It’s arguable that the scariest part of buying a home is the financial planning it takes to prepare to buy a home. But never let that fear deter you from making decisions, because if you find the right resources and surround yourself with the people who can support you, then you’ll have the best foundation to build on.

That being said, add this post to your arsenal for preparation to buy a home because I’m breaking down everything you need to know about what you need to have, cash wise, to bring to the table when buying property!

If you’re thinking about buying property, let this be an opportunity to get clear on your financial situation, and begin planning for your future!

First and foremost, I’m highlighting the larger/largest cash payments you’ll make in the process of buying property.  These include the:

1. Down Payment, which can range from 3-25% or more;

2. Closing Costs, ranging from 3-5% of the purchase price of the property;

3. & Earnest Money, which generally is 1-2% of the purchase price.

The key is that you’ll absolutely want to have these saved away and prepped when getting serious about looking.  A lender, if you’re applying for a mortgage loan, will want to know roughly what kind of liquid cash you have to determine your qualifying price range, and these totals can inform them significantly.

The next round here are the additional costs that are involved, especially for those of you planning to qualify for a mortgage loan.

1. Inspections, generally between $300-$600 depending on the quality of the inspector and what services you want. I highly recommend ordering a thorough inspection to give you clarity and peace of mind about the property you are looking to purchase.

2. Appraisals, usually $300-$500.  These are ordered by the lender and give them clarity about the value of the property based on the market which ensures they’re not over lending to you on the property.

The last bit of cash I highly recommend you account for when preparing is a “cushion fund” which could include whatever you feel necessary.  A cushion fund could be a variable budget which allows you to do repairs, or if something arises in the process you know you can manage if you had to for some reason.

As always, I’m not a financial advisor or mortgage advisor, however, as a Real Estate Agent, these are some of the largest points of cash-out for buyers.  If you ever have financial questions, be sure to reach out to a financial fiduciary so you get the most accurate and knowledgeable supporter.  If you need recommendations, I have many so don’t hesitate to reach out to me for referrals!

If you have any questions or concerns about your own financial situation, contact me! I’d love to connect you with the right person to support future you in buying your home.