Most people aspire to buy a home in their lifetime. Although buying a house is a dream most people have in common, it is not an easy project to achieve. The exorbitant sums of money required to make this purchase are causing a lot of people to put this dream away. This piece will discuss how many savings you need to have to buy a house.
The amount of the down payment
The down payment is the money a buyer needs to have in order to pay for part of the property they want to buy. In general, the amount for the purchase of a home is calculated by banks using the following formula: purchase amount = down payment + 1.5% of the sale price.
The amount of the down payment is therefore important to know the cost of a house to buy. But, calculating this cost can be more complex than that. Banks typically require 20% down payment.
On the other hand, a buyer can put less than 20% down payment. Indeed, some buyers put 5% to 15% down payment. By putting less than 20%, however, expect to have an additional expense to pay. The amount of the down payment is not the only amount that the prospective buyer should pay attention to. To buy a house, you also have to think about the notary fees.
Going to the notary is the step to formalize the purchase and finalize the transaction. This is why it is important for the buyer to take into account the notary fees. It is the notary who will take care of his client’s down payment.
Also, he takes care of the transfer of property as everything happens legally. This is why this expense is important to the buyer. Apart from the notary fees, the buyer of a new house must also think about his home cover.
The amount of home insurance
Homeowners need to be covered by home insurance. This allows them to be covered in the event of a flood, fire, major breakage or sewer backup. Thus, in the event of a problem, it is the insurer who takes care of the payment of the repairs.
Home insurance is a solution that gives homeowners peace of mind, but it doesn’t come cheap. In addition, the guarantees and contents of home cover vary depending on the insurer or the chosen offer.
Also, the insured can choose the amount of his policy, the level of deductible, as well as the inclusions and exclusions. This is why the cost of home insurance varies. This amount can be paid all at once with a purchase or in installments. In addition to the amounts mentioned above, the buyer may encounter unforeseen events or have renovations to do.
The amount of renovations
The buyer of a new property should take into account possible unforeseen events and renovations. It can be cosmetic touch-ups on the house, plumbing, etc. Thus, it is necessary to provide an additional sum not to be caught unawares.
In short, to buy a house, you have to save enough for the down payment, for notary fees, and for other expenses related to the purchase.