Buying a house will be one of the biggest expenses you’ll ever have to pay. However, the process of payments won’t be quick or simple. Namely, from the down payment to agents’ fees, taxes and insurance, you will have to go through a full spectrum of costs before you can finally say you’re done. Are you wondering what all those costs are? Check out the list below.
Mortgage costs
It may sound ridiculous at first, but borrowing money will cost you. The mortgage itself, alongside the follow-up administrative fees, is paid by the homebuyer. Down payment is the first in a line of costs and also the biggest mortgage cost you’ll need to pay,. Get ready to pay a minimum of 3.5% of the agreed-upon purchase price. With the follow-up 20% down payment, you can cut private mortgage insurance. The following fees after mortgage include an application fee that lenders require for their service. Some lenders will also require you to pay an origination fee and a credit report fee.
Agents’ fees
A smart homebuyer will always hire a professional to lead them through the homebuying process. So, when the time for applying for a mortgage comes, you’ll want to have a mortgage broker by your side to negotiate the best deals. They will also require a certain fee, so put them on your list of homebuying costs. After your mortgage is pre-approved, you’ll start looking for a house, but you shouldn’t do it alone. A real estate agent will know exactly where to look for your dream house. Based on all the criteria you have they will take you to all the potential homes. You’ll save precious time for a very reasonable fee.
Home inspection fee
Once you’ve found the home of your dreams, you don’t want to rush into sealing the deal. First, you’ll need a home inspector who will scan the property from top to bottom and let you know if the property is worth the money you’re willing to pay. Even if you weren’t planning on paying for a home inspection, the lenders could be those who will require homebuyers to schedule the inspection. Don’t risk investing in a house that is not livable and structurally sound. These costs can go from $300 to $500. However, the location and the condition of the house itself can affect the inspection fee rate.
Home insurance fees
Moving into a new home needs to be a joyous occasion that will leave you worry-free for at least a year. That’s why homebuyers invest in home insurance. Don’t worry about floods, hurricanes, or other hazards, but pay for home insurance to keep peace of mind. However, you need to be careful about signing junk insurance during all those contract signings. Even when you sign a mortgage, you should be aware of hidden unnecessary costs. Now you probably have one thought in your mind – what is junk insurance, and how do I avoid it? Banks tend to sell consumer credit insurance that is initially designed to protect the person taking a loan if something happens and they can’t afford the repayments. In many cases, the insurance turns out to be useless or it may offer very poor value for money. So, always read the fine print when you sign insurance policies and loan contracts to avoid paying a higher fee than necessary.
Taxes
Numerous factors affect the taxes fees you’ll need to pay after buying a home. One of the main actors is your location. However, many homebuyers tend to prepay two months’ worth of county and city property taxes. A transfer tax is another potential fee you’ll need to prepare for. The government will also require you to pay a transfer tax, that varies by state and municipality. Depending on the agreement, you pay to be the one to pay for the entire fee, or you can decide to split it with the seller.
Moving costs
After you’ve bought the home, you’ll need to plan for all the furniture to arrive in your new house. That’s where the moving costs come in. Look for a moving company and hire a team of people to transport all your sofas, beds, kitchen appliances and bulky furniture that you wouldn’t be able to fit inside your car. If the house is massive, you’ll want someone to give you a hand in cleaning and sanitizing the property, so consider paying a team of skilled people to help with pre-move home cleaning.
Final thoughts
Buying a new home will be thrilling but expensive. That’s why you’ll need to make sure you’ve saved enough money to be able to pay all the costs that come with your dream house. There will be a full spectrum of fees but once you’ve paid them, you’ll be able to enjoy your new home and make the most of your new life in it.