Upfront Expenses

A down payment is a portion of the property's purchase price paid upfront. The percentage required varies depending on the type of loan and lender requirements. Typically, it ranges from 3% to 20% of the purchase price.  

A home inspection involves hiring a professional inspector to evaluate the property's condition. The inspection covers structural elements, electrical systems, plumbing, roofing, and more. This fee ensures that the buyer is aware of any potential issues with the property before finalizing the purchase.  

An earnest money deposit is a sum of money paid by the buyer to show their serious intent to purchase the property. This deposit is usually held in escrow and applied toward the down payment or closing costs at closing. If the deal falls through due to the buyer's fault, the seller may keep the deposit.  

Prepaid expenses are costs that need to be paid upfront at the time of closing but cover future costs. These typically include:

• Property Taxes: Paid in advance to cover taxes for the first few months of ownership.
• Homeowners Insurance: Covers the property against damages or losses and is usually prepaid for the first year.
• Mortgage Interest: Covers the interest on the mortgage from the closing date to the end of the month.

An appraisal fee is paid to a professional appraiser who assesses the property's market value. Lenders require this to ensure the property is worth the loan amount.

Title insurance protects the buyer and lender against potential issues with the property's title, such as liens or disputes. This insurance is a one-time, upfront cost.