Prepare for earnest money, inspection, appraisal costs when buying a Minnesota home
Minnesota home loan application
When it comes time to ask questions about applying for a Minnesota home loan, You’ll find that you can ask questions, learn about the process, fill out and work on the application while sending in documents online for awhile before you are putting out some of your real money for additional upfront fees such as: inspection, appraisal, earnest money or a down payment.
It’s not uncommon for someone to ask questions about the application process the first couple of weeks then you would start sending in home loan paperwork like bank statements, w-2’s, etc.
Your Minnesota home loan expert will tell you what is needed before you are provided with a pre-approval letter and he/she will let you know what obstacles to overcome that are currently in your way.
Obstacles may be something like: collections, or paying down credit card balances, it could be making sure the loan person knows of all of your income, child support, disability, tips, etc.
Eventually you’ll get a pre-approval amount and then research Minnesota homes and photos online. After awhile you’ll find some homes that you’ll like to go see in person with an a Minnesota real estate agent.
Earnest money, inspection, appraisal fees
Eventually you will need to show a pre-approval and hand over earnest money. This may be as little as $500 to $1000 just as an example, depending on how much the seller is comfortable with.
You can see how this could be a couple months from the timeline when you ask your first set of loan questions, so you have a little time to save.
Eventually after you win on the negotiating on a Minnesota home offer and purchase agreement you will come up with money for an inspection if you choose to get one.
You can plan on this to be over $400, and quickly around that time plan on having $500+ for a home appraisal that will be needed by the lender. Save some money now, so that you can be prepared for these expenses for later.
Earnest money should be credited at the time of the closing on the hud-1 settlement statement with the title company and you should talk to your loan expert and agent about writing any Minnesota home offers with the closing costs rolled into the loan, talk to them about how that works.
Minnesota home loan down payment upfront
If you go with an FHA home loan, plan on coming up with 3.5% or more for a down payment.
This is historically not very much down and historically the low 580+ credit score requirement is a pretty attaintable goal.
This down payment will be in addition to the other money for fees mentioned above, but it’s still less than you would need upfront for a Minnesota contract for deed with no bank involved.
Today’s lenders really don’t ask you as a Minnesota home buyer to put very much money out of your pocket to buy a home. You just have to be a bit conservative with your finances and save some of your money each week so that you can earn your dream home.
You can do it if you really put your mind to it. It’s important to talk online and start a conversation so that you collect some data and know where it is that you stand with your current financial situation, so that you can see what it will take to earn that pre-approval letter from your local mortgage expert.