How to prepare for home buying costs, besides the mortgage, when purchasing your home.
There are a lot of details you should know about and things to prepare for when buying a home – especially the various costs involved with the initial purchase and the monthly payments.
Buying a home is a big decision and there are many other factors other than just the monthly mortgage you will have to be responsible for. When first buying a home, there are various items that cost money initially, along with recurring monthly costs.
Your realtor, The Lawhead Team, will help explain every detail of what these costs are and where exactly they are going. The Lawhead Team can help you determine how much you can afford and what you can afford and what exactly you will need to set aside for any extras.
On top of a monthly mortgage, there are other fees such as insurance, taxes and sometimes legal fees. Below is a list of some various costs you might come across as a home buyer and should keep in mind to prepare for.
–Application Fee – If your lending institution has to charge to process your mortgage application, you will encounter an “application fee”. Most of the time if you are dealing with a bank you currently have other accounts with, they will waive the fee.
–Appraisal Fee – An appraisal is usually done by someone on the lender’s staff or by an outside professional hired by the lender. Usually, the lender loans a percentage of the home’s purchase price or the market appraisal of the property, whichever is lower. In most cases, the cost of the appraisal ends up being the responsibility of the home buyer.
-Home Inspection Fee – An inspection of the home is highly recommended before confirming your final offer on a home. This will notify the buyer of any potentially large or small costs they will incur once the home is theirs.
–Home Insurance – If you are putting less than 25% down on your home, you will need to purchase mortgage insurance. There are also other types of insurance that may be required when buying your home such as fire insurance, title insurance, life insurance and more.
–Land Survey Fee – A plot plan or survey of the property is required by lenders. If your home is in a subdivision in an urban area, lenders will usually accept an existing survey. However if there has never been a survey done on the land, prepare to pay a significant fee for a new survey.
–Legal Fees – You will need to have a lawyer arrange your mortgage as well as “disbursements” such as title search, drawing up the title deed and preparing and registering the mortgage.
There may be other costs you come across as well which we have not mentioned above. Of course there are utilities, such as gas, electric, cable, etc along with the possible HOA fees depending on where you live.
We suggest putting away money each month for any necessary repairs or unseen maintenance that may come up. Even with additional costs, buying a home is definitely affordable for many people. As long as you know what to expect and budget your money wisely, you will be enjoying your new home in no time!
