When buying a home you need to know how much you can comfortably afford, how much your lender will underwrite in the form of a mortgage, what your own out-of-pocket expenses will be, and what kind of contingencies need to be included in the offer to allow you some negotiating room.
Click on the different sections below to learn about buying a home.
Home buying costs
- Purchase Price
- Home Inspections | $200 – $400+
- Appraisals | $400 – $600
- Moving Costs | Cost may vary based on moving distance
- Closing Fees | Lender/Title Company/Administrative Fees: (~2.5% of purchase price)
If you decide to purchase a new home, different costs may arise:
- Most new homes do not have completed landscaping so it is important to factor the cost of landscaping into your budget.
Annual Percentage Rate (APR): The total yearly cost of a mortgage stated as a percentage of the loan amount; includes the base interest rate, primary mortgage insurance and loan origination charges (points).
Amortization Period: The time (years) it will take to repay a mortgage in full. The longer it takes to pay off, the more interest one pays, due to lenders charging interest on mortgage loans.
Appraisal: A professional opinion of the market value of a property.
Down payment: The portion of the purchase price which the buyer pays in cash; is not financed.
Escrow: The holding of documents and money by a neutral third party prior to closing.
Fixed-rate mortgage: The interest rate does not change during the loan term.
Lien: A legal claim against a property that must be paid when the property is sold.
Lock-in: A written agreement guaranteeing the homebuyer a specified interest rate provided the loan is closed within a set period of time.
Pre-qualification: The process of determining how much money a prospective homebuyer will be eligible to borrow before a loan is applied for.
Underwriting: The process of evaluating a loan application to determine the risk involved for the lender.
- Available to veterans and active duty members of the Armed Forces, Selected Reserves, and National Guard; must provide Certificate of Eligibility
- Veterans can use entitlement multiple times; not required to be a first-time buyer. Additional restrictions may apply
- No minimum down payment required with sufficient entitlement – VA high balance loans may require a down payment even when sufficient entitlement is provided. See a mortgage lender for details.
- 4% seller concessions allowed for closing cost assistance
- Gift funds from family members may be used towards closing costs
- Borrower must have a minimum 620 credit score
- No mortgage insurance premiums; Potential annual savings of .30% – 1.15% of the loan amount
- Ability to refinance up to 100% of the home’s appraised value
- El Paso County loan limit – $417,000
- Funding fee (percentage of the loan amount) can be financed into the loan