You’re looking into buying a house. You’re trying to save up a reasonable downpayment. But you’re wondering: how much does it typically cost to buy a house?
In truth, the costs vary wildly based on a variety of factors. In one area, you might be able to buy a three-bedroom house for $150,000. In another area, that same house might cost $500,000.
So, instead of telling you exactly what you’re going to have to pay, we’re going to tell you about all of the costs associated with a home purchase. Let’s get into it, shall we?
The Cost of the Home Itself
The biggest cost, of course, will be the cost of the home itself. If you’re in a rural area in, say, the midwest, you might be able to find a home for as little as $100,000. If, on the other hand, you’re in Boston, MA, for instance, you’re going to be paying almost a million dollars for a home.
Prices vary based on housing demand in the area as well as on how much housing supply exists. The more people that want to live in an area, the more expensive its houses will be.
The Cost of the Mortgage
If you’re like most homebuyers, you’re going to buy your home with the help of a mortgage. A mortgage is a home loan. It requires not only that you pay off the house itself but that you pay off the interest on the house as well.
Interest rates vary based on the buyer’s credit score and income as well as other factors, such as the type of loan that’s taken out. The lower your interest rate, the less you’ll pay over time.
For example’s sake, let’s say you’re buying a $200,000 house over the span of 30 years with an interest rate of three percent. In that case, you would pay around $100,000 of interest in total. For more information on this matter, use this mortgage calculator.
Note, when shopping for mortgages, you’ll probably come across the term APR. This is similar to interest but a little different as well. Learn the difference between interest rate and APR now.
Regardless of where you live, you’ll need to pay property taxes as well. These fluctuate over time and vary based on area. Some towns might have property taxes as low as $50 a month; others can have property taxes up past $1,000 a month, even for average-sized homes.
You’re going to want to get insurance for your home as well. In fact, if you get a mortgage, you’ll likely be forced to. This adds anywhere from $50 to $200 extra every month.
There is a bevy of additional fees associate with purchasing a home, most of them one-time fees. These run the gamut from inspection fees to appraisal fees and more. Odds are, they’ll add a few thousand more dollars to your purchase.
The Cost to Buy a House Will Vary Based on the Circumstances
And there they are, all of the costs associated with buying a home. As you can see, the cost to buy a house varies based on the specific circumstances of your situation. The only way you’re going to figure out the true cost is by engaging in the home buying process.
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