Thursday, May 26, 2022 / by Anthony Thornton
Extra Costs to Consider Before Purchasing a Home
Whether you're planning to buy your first home or trade up to a larger one, there are a number of expenditures to consider in addition to the purchase price when determining your affordability. If you aren't aware of and prepared for these additional fees, such as taxes and other costs, you may be surprised with an unexpected financial nightmare on closing day. Some of these expenses are one-time set payments, while others are paid on a monthly or annual basis. Although not all of these charges will apply in every circumstance, it's preferable to be aware of them ahead of time so you can plan accordingly.
1. Fee for Appraisal
Your lender may seek an appraisal of the property, which you would be responsible for paying. The cost of an appraisal might range from $175 to $300.
2. Fee for Mortgage Loan Insurance
Some mortgages require mortgage loan insurance, depending on the amount of equity in your home. This form of insurance will cost you anywhere from 0.5 percent to 3.5 percent of your total mortgage amount. Payments are usually made monthly, in addition to your mortgage and taxes.
3. Costs of Moving
The cost of hiring a professional mover can range from:
For a vehicle and three movers, expect to pay $50-$100 per hour, plus
During peak demand seasons, prices are 10-20% higher.
4. Fees for upkeep
Condominiums impose monthly fees for common area services such as lawn care and hallway carpet cleaning. The cost will vary based on the structure.
5. Fees for Legal Services
A lawyer should be involved in even the simplest of property acquisitions to evaluate the papers. Shop around because fees vary widely depending on the complexity of the issues and the lawyer's experience.
6. Taxes on real estate
Your lender may decide to include your property taxes in your monthly mortgage payments, depending on your down payment. Your lending institution may want annual verification that your property taxes have been paid if they are not included in your monthly payments.
7. Fee for conducting a survey
If you're buying a resale home rather than a new one, your lender may request an updated property survey. This survey can cost anything from $700 to $1,000.
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