Living in Austin & Suburbs
It is pretty common practice to save for a down payment in preparation for buying a home in Austin or anywhere else. With the mortgage market melting down, it is very rare or even impossible to find a mortgage that will allow zero down payments. Although VA and FHA loans still require little to no money down, most potential homebuyers will have to first save at least 5 to 20% of the home’s value.
Many first-time homebuyers are unfortunately not aware that apart from the big down payment, they also have to pay thousands of dollars for closing costs that they may not have budgeted for. The national average, including for Austin real estate, for closing costs is between 2 and 4% of the purchase price, which adds a considerable amount to the savings required to buy a home. Although not a closing cost as such, most lenders also specify that buyers need a savings reserve equal to at least two months of the mortgage payment. As you can imagine, this tends to add up tremendously.
Costs Breakdown
Closing costs include fees charged by the closing attorney or escrow, together with costs associated with obtaining a home loan. These include:
• Title search and filing fees
• Escrow fees
• Home inspection fees
• Appraisal fees
• Wire transfer fees
• Loan costs – These include what are known as “points”. A point is 1% of the buying price and is used as both an upfront fee to reduce the loan interest rate and commission for the lending officer.
These are only a few of the extra costs you will need to consider with buying and closing on a new home. It is very important to know what these costs are beforehand, so potential homebuyers are able to save the appropriate amount required to buy a home. Nobody wants to end up missing out on the perfect property because they were not prepared for the cost of buying a home in Austin.
Related articles:
Top Neighborhoods in Northwest Austin
Expert in: Living in Austin & Suburbs
Austin real estate expert helping families find their perfect home in the Texas Hill Country.
More to Read
Liberty Hill is officially one of the fastest-growing cities in Texas — and it's not hard to see why. From major retailers breaking ground to highly rated schools and Hill Country views, here's a clear-eyed look at what life in Liberty Hill actually looks like right now.
Cedar Park is one of the fastest-growing cities in Texas — and it's not slowing down. From a brand-new convention center to top-rated schools and over 1,000 acres of parkland, here's what you really need to know before making the move.
Georgetown, Texas offers the rare combination of small-town charm, affordable housing, and rapid growth — but before you pack your bags, here's the full, honest breakdown of what life there actually looks like.
Ready to Make Your Move?
Have questions about Living in Austin & Suburbs? Get personalized guidance from a local expert who knows the Austin market inside and out.
Angie Ufomata
Real Estate Expert
Helping You Find Your Way Home