13 EXTRA COSTS TO
BE AWARE OF BEFORE BUYING A HOME
Whether you're looking to buy your first home, or trading
up to a larger one, there are many costs - on top of the
purchase price - that you must figure into your calculation
of affordability. These extra fees, such as taxes and other
additional costs, could surprise you with an unwanted financial
nightmare on closing day if you're not informed and prepared.
Some of these costs are one-time fixed payments, while
others represent an ongoing monthly or yearly commitment.
Not all of these costs will apply in every situation, however
it's better to know about them ahead of time so you can
budget properly.
Remember that buying a home is a major milestone. Whether
it's your first, second or tenth home, there are many important
details to address during the process. The last things you
need are unbudgeted financial obligations cropping up hours
before you take possession of your new home.
Read through the following checklist to make sure you're
budgeting properly for your next move.
Your lending institution will probably request an appraisal
of the property, which would be your responsibility to pay
for. Appraisals can vary in price from approximately $225
-$350.
Depending on your down payment, your lending institution
may decide to include your property taxes in your monthly
mortgage payments. If your property taxes are not added
to your monthly payments, your lending institution may require
annual proof that your taxes have been paid.
When the home you purchase is a resale (vs. a new home),
your lending institution may ask for an updated property
survey. The cost for this survey can vary between $700-$1,000.
Home insurance covers the replacement value of your home
(structure and contents). Your lending institution will
request proof that you are insured as it protects their
investment on the loan.
Any new utility that services your hook up, such as telephone
or cable, may require an installation fee.
Even the simplest of home purchases should have a lawyer
involved to review all paperwork. Shop around, as rates
vary greatly depending on the complexity of the issues and
the experience of the lawyer. Fees can range from $400-$500
for a competent attorney.
Depending upon the equity in your home, some mortgages
require mortgage loan insurance. This type of insurance
will cost you between 0.5% - 3.5% of the total amount of
the mortgage. Usually payments are made monthly in addition
to your mortgage and tax payment. This is also known as
PMI. Depending upon the amount of down payment and the financing
program, this could be waived.
A mortgage broker is entitled to charge you a fee in order
to source a lender and organize the financing. However,
it pays to shop around because many mortgage brokers will
provide their services free to you by having the lending
institution absorb the cost.
The cost for a professional mover can cost you in the range
of:
$50-$100/hour for a van and 3 movers, and 10-20% higher
during peak demand seasons.
Condos charge monthly fees for common area maintenance
such as grounds keeping and carpet cleaning in hallways.
Costs will vary depending on the building. This cost must
be disclosed on the Disclosure Report (required by NC Law).
If the home you purchased is serviced by a well, you should
consider having your water checked by your local experts.
Depending upon where you live, determines whether or not
a fee is charged, to certify the quantity and quality of
the water.
If the town you live in has made local improvements (such
as the addition of sewers or sidewalks), this could impact
a property’s taxes by thousands of dollars.
This tax is applied whenever property changes hands and
the amount that is applied can vary.
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