The best way to determine the exact amount is to consult a mortgage representative. But generally speaking, 100% loans or 80%/20% loans to avoid PMI are no longer available, with the exception of the VA (Veterans Administration) loan. The next best option (as far as minimal down payment) is an FHA loan which requires only a 3 1/2% down payment.

Next you need to consider closing costs. In Michigan, we pay taxes a year ahead. This means part of your closing costs will include reimbursement of the seller’s prorated, prepaid taxes. This can also be a negotiating point. Another closing cost, comes in the form of tax escrow. Your mortgage company may require a certain amount of months worth of taxes to be held in an escrow account to ensure you’ll be able to pay them for the next year (varying anywhere from 3 months to a full year). Also, you will be required to prepay one year’s worth of home owners insurance at closing (paid receipt provided at or before closing).

There is also an office transaction fee associated with nearly every deal. This fee ranges from $195-$800 and is charged by the office of your buyer’s agent. The fee at my office is $200 and goes towards keeping your paperwork on file and the ability to obtain legal advise for your deal should we need it. Each office is different so check with your Buyer’s agent. Usually there isn’t a fee for the Buyer’s agency representation unless you’ve agreed to something specific.

Most importantly, for a buyer’s peace of mind, is the home inspection. Cost varies based on size of the home and range from $225-$400 and more if you add on other inspections like radon, well &/or septic, etc. Inspection money is generally an out of pocket expense and unable to be recouped by concessions or monies contributed toward the loan.

It is also important to note that not all of these costs have to come out of you own pocket. Some of these monies can come by way of gift or contribution, some can be covered by concessions (or money back from the seller at closing to cover the costs). Usually, if you at least have the amount of the down payment set aside, you can avoid additional documentation associated with a monetary gift.

Buying a home is an exciting and often an overwhelming time. All this information can be further explained in greater detail by your Realtor and/or your mortgage representative.

Look forward to chatting with you soon.

Most sellers have real estate agents handle the sale of their property because there are so many forms, state compliances, etc. that have to be met; and, the average seller just does not want to mess with all of the things required themselves. It has been proven statistically that sellers who use agents average a better selling price for their property. A good agent generally pays for themselves. Exposure is paramount, especially in a market as difficult as today’s market. A good real estate agent has the contacts and finances to expose their listed properties to the max.

Also, many sellers just don’t like to negotiate and a good agent is very adept at negotiating for the benefit of their client. A wonderful bond can take place between the seller and their agent, creating a level of trust that is necessary to bring the offer through to a successful closing.

Now is a great time to buy as both prices are low and interest rates continue to be good. I understand that some buyers feel house prices might get even lower and therefore, wish to wait to get a better deal in the future. If that is the case, consider that interest rates may rise in the future so lower home price and higher interest rates could equate to roughly the same monthly payment (as a low interest rate and slightly higher purchase price).

Right, prices may not have totally bottomed out. However, the benefit of purchasing now is a great price and home ownership. There is value in having a home to call your own.

Housing prices will come back and start increasing eventually. People will always need a place to live!