Home ownership is a goal for many. Down payments and mortgage payments are the big items you think about but it is the hidden costs that cause stress if you are not prepared for them. Some costs happen at purchase time, some happen every month, and some can be a surprise. Here is what you need to know about all of them.
Early Unexpected Costs
Many of these costs have to be paid before you even move into the home and they can easily total more than $10,000.00 you weren’t expecting to pay.
House Inspections and Appraisals
There are things your home inspector won’t tell you but you should find out about any possible major issues. You can use the information to negotiate a lower price or refuse to buy. Inspections cost between $300.00 and $600.00. Some mortgage lenders and insurance companies require an inspection certificate when you buy a house.
All lenders require an appraisal before writing up the mortgage agreement. (You will also find out if you are paying too much for the property.) Appraisals also cost between $300.00 and $600.00.
Closing Costs
The US national closing cost average is $6900.00 (Statistics from 2021.) The total amount is usually 2% to 5% of the selling price. Fees and costs may vary according to local jurisdictions. Closing costs paid by the buyer usually include some or all of the following:
- Adjustments. Per-diem interest, taxes, HOA fees (if applicable), etc.
- Application Fee.
- Appraisal Fee.
- Attorney Fee.
- Credit Check Fee.
- Origination Fee.
- Property Survey Fee.
- Recording Fee.
- Title Search Fee.
- Transfer Tax.
- Underwriting Fee.
Homeowner’s Insurance
Mortgage lenders require homeowner’s insurance before writing the loan. It also makes sense that you want to protect your biggest investment. The average cost of insurance for a $300,000.00 home is $2285.00 per year–about $190.00 per month. This usually doesn’t…