Prepare for earnest money, inspection, appraisal costs when buying a Minnesota home
When it comes time to ask questions about applying for a Minnesota home loan. You’ll find you can ask questions and learn about the process and fill out and work on the application while seeing in documents for awhile before you are putting out some real money.
It’s not uncommon for someone to ask questions about the application process the first couple of weeks then start heading in paperwork like bank statements, w-2’s, etc.
The loan person will tell you what is needed before you are pre-approved and what obstacles are in your way. Obstacles may be collections, or paying down credit card balances, it could be making sure the loan person knows of all income, child support, disability, tips, etc.
Eventually you’ll get a pre-approval amount and them research and search homes and photos online. After awhile you’ll find some you’ll like and go see them in person with an agent.
Eventually you will need to show a pre-approval and hand over earnest money. This may be $500 to $1000 as an example. You can see how this could be a couple months from when you first ask loan questions.
Eventually after you win on the negotiating on a purchase agreement you will come up with money for an inspection if you choose to get one.
I’m sure this will be over $400, and quickly around that time $500+ for a home appraisal that will be needed by the lender. Save some money and be prepared for these expenses for later.
Earnest money should be credited at the time of the closing and you should talk to your loan expert and agent about writing any offers with the closing costs rolled into the loan, talk to them about how that works.
If you go with an FHA loan plan on coming up with 3.5% or more for that as well, your mortgage expert can discuss this with you.