What you need to know…and do….beforehand.

You want to own your own home someday.  A dream of many.  You need to know what is expected of you first.

You will need a down-payment of 20% (or more) of the cost of the home you’re choosing. You will also need approximately $5,000-7,000. for other costs associated with the closing: home inspection, legal fees, title, Homestead Act, etc.  All necessary to complete the transaction.

The 20% (or more), is the down-payment figure used, because if you put less down, you will have to get Mortgage Insurance (which will have to be paid monthly until you reach your 20%. The home inspection cost (approximately $500.) is for your protection. A registered home inspector is hired by you (before you actually purchase the home), and he/she goes through the house thoroughly and lets you know what needs to be repaired/replaced now or in the near future and approximate cost for each.  This now gives you the opportunity to ‘back out’ of the deal If there are costly repairs coming up, that may be out of range of your budget.  Or, you could negotiate with the sellers to either make repairs or deduct money from the price of the home and you will handle the repairs on your own.

The closing costs are just that…. costs at the time of closing the deal.  You should have a lawyer, and he/she will draw up papers and go to the Registry of Deeds to register the purchase/sale.

So that is where the figures of at least 20% plus legal costs fits in.

Now, do you have a few thousand dollars (for a lawnmower, some plants etc or if you want to paint the living room or kitchen?  This would be a good idea too.

It sounds ominous, but truly it’s doable.  Be disciplined about saving and you’ll get there.

And when you have the money you need set aside, then shop for the best rate on a loan and a reputable mortgage lender.