Page 12 - How To Buy A Home In Louisville

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FAQs

? How much money do I need to have to get started?

Contrary to popular belief, you may not need to have a down payment to buy a house. You are,
however, required to pay a certain amount of money, called a Good Faith Deposit, at the time
of your offer to buy the house. This lets the seller know that you are serious about your offer. If
the offer is refused, you get your money back. In addition to the Good Faith Deposit (approxi-
mately $500-$3,000 depending on the house price), there will be:
■ A home inspection fee (around $350-$700 depending on the house size and company)
■ A termite inspection fee (around $50-$125 depending on the company)
■ Radon test ($150)
■ An appraisal fee (around $350-$450)
Overall, the average amount of money needed is about $1,000. The rest of the closing costs
could potentially be paid for by the seller if requested in your offer.

? When should I buy versus rent?

Consider renting if you think you’ll need to move soon. Given all costs associated with buying
and then selling a home, and the 3% to 5% average appreciation rate in the Louisville area, if
you don’t expect to hold on to your home for at least two years, you could lose money. On the
other hand, if you make money, you’ll pay capital gains taxes. Ask an accountant about the
tax benefits of buying a house and deducting the interest paid from the taxes due in April. You
could save a lot of money at tax time by buying instead of renting, and your home could be
your greatest financial investment.

? How do I choose a lender?

We recommend getting someone local who is qualified and experienced in your type of loan.
Ask your River Valley Group agent for a list of local, respected lenders that our clients had great
experiences with.

? What first-time buyer programs are available?

Many first-time buyer programs are locally developed and administered, like the Kentucky
Housing Corporation (KHC) grants. Some programs even have forgivable loans through Louis-
ville Metro Housing. Ask a loan officer about gift and grant programs for homebuyers. Most of
these programs have certain income levels to qualify, but it’s worth taking the time to ask!

The River Valley Realty Group - How to Buy a Home in Louisville, Kentucky 10