Buying a House FAQ

Questions:

• Can I afford to buy a house?
• Should I line up a real estate agent first, or just start shopping for a house?
• If I decide to buy a house, how much money will I need up front?
• What's the "earnest money deposit" on a home purchase?
• What are closing costs on a home purchase?
• What exactly is the "closing" part of the home buying process?
• If I find a house I like, should I bid under the list price?
• I've heard that I should buy as much house as I can afford. Is that true?
• After I offer to buy a house, how long before it becomes mine?
• If I buy a house, will the seller leave behind things like the curtains and the refrigerator?

Answer:

What are closing costs on a home purchase?

On the day your home purchase wraps up, as the buyer you'll be expected to pony up cash for various closing costs. These include transaction costs like loan setup fees, property inspections, the escrow or title company's fees, and more -- sometimes in the thousands of dollars. See www.bankrate.com for a state-by-state analysis of the loan portion of buyers' closing costs.

Closing costs also include what you owe for homeowners' insurance, mortgage insurance (or PMI, typically charged if you're putting less than 20% down), your share of that year's property taxes, and more. The total is usually around 2-3% of the house price, depending on what state you live in, what kind of mortgage you get, and more.