What upfront costs can I anticipate when purchasing a home?

Buying your dream home can have both immediate and long-term financial implications. As a prospective homeowner, you should understand the upfront costs associated with homeownership so you can be prepared when they come up. 

1. Upfront Costs: Before the sale is complete, there are a few upfront expenses that you’ll be expected to pay. These are usually paid out of your own pocket and include:
   1. Earnest Money: This is a good-faith deposit usually made within three days of your offer being accepted, which goes toward the down payment. This is typically around 1-3% of the home’s total purchase price.
   2. Closing Costs: Closing costs cover the fees incurred to finalize the sale and mortgage loan, including lender’s fees, commission to your real estate agent, home appraisal, inspections, and mortgage underwriting fees. Closing costs are typically 2-5% of the purchase price.
   3. Down Payment: Your down payment is how much of your own money you're putting toward the purchase. It may be 3-20% of the purchase price.