"The last thing you need are not budgeted financial obligations cropping up hours before you take possession of your new 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 bud-get properly.
Remember, 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 thing you need are financial obligations that you didn't plan for cropping up hours before you take possession of your new home.
Check out the following:
1. Appraisal Fee
Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 500.
2. Property Taxes
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.
3. Survey Fee
When you purchase a resale home, your lending institution may ask for an updated property survey. The cost for this survey can vary between $700- $1,000 or more.
4. Property Insurance
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.
5. Service Charges
Any new utility services your hook up, such as telephone or cable, may require an installation fee.
6. Legal Fees
Even the simplest of home purchases should have an attorney involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the attorney.
7. Mortgage Loan Insurance Fee
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.
8. Mortgage Brokers Fee
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.
9. Moving Costs
The cost for a professional mover can cost you in the range of:
• $50-$1O0/hour for a van and 3 movers, and
• 10-20% higher during peak demand seasons.
• You might consider I-Pods, where you load up portable cubes, have them picked up and sent over to the new address.
• Another way is to have a trucking company drop a trailer in front of the house, then pick it up after you have it packed then pulled to the new address.
10. HOA I CC&.R's I Maintenance Fee's
HOA - Many Single Family Residences, Condos and Townhouses in some markets have what is called Home Owners Associations Fees (HOA), Covenant's, Conditions & Restrictions (CC&R's) and Master Planned Communities. These Fees may be as low $10 to over $100, and could have both (HOA) and Master Planned Associations. In many instances where these fee's are due, it is part of the agreement you must pay for and agree to prior to close of escrow. These associations can go both ways as far as being beneficial, some home owners have a real problem living with some of the restrictions and people who enforce them. By law you must be given these documents and you should review them early in the stages of an offer with contingencies.
• Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building.
11. Water Quality and Quality Certification
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. Certification is a MUST in most areas.
12. Local Improvements
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. In some case these are referred to as (LID's & ClD's) and your agent should have knowledge of these in the area.
13. Land Transfer Tax
This tax is applied whenever property changes hands and the amount that is applied can vary.
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 bud-get properly.
Remember, 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 thing you need are financial obligations that you didn't plan for cropping up hours before you take possession of your new home.
Check out the following:
1. Appraisal Fee
Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 500.
2. Property Taxes
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.
3. Survey Fee
When you purchase a resale home, your lending institution may ask for an updated property survey. The cost for this survey can vary between $700- $1,000 or more.
4. Property Insurance
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.
5. Service Charges
Any new utility services your hook up, such as telephone or cable, may require an installation fee.
6. Legal Fees
Even the simplest of home purchases should have an attorney involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the attorney.
7. Mortgage Loan Insurance Fee
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.
8. Mortgage Brokers Fee
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.
9. Moving Costs
The cost for a professional mover can cost you in the range of:
• $50-$1O0/hour for a van and 3 movers, and
• 10-20% higher during peak demand seasons.
• You might consider I-Pods, where you load up portable cubes, have them picked up and sent over to the new address.
• Another way is to have a trucking company drop a trailer in front of the house, then pick it up after you have it packed then pulled to the new address.
10. HOA I CC&.R's I Maintenance Fee's
HOA - Many Single Family Residences, Condos and Townhouses in some markets have what is called Home Owners Associations Fees (HOA), Covenant's, Conditions & Restrictions (CC&R's) and Master Planned Communities. These Fees may be as low $10 to over $100, and could have both (HOA) and Master Planned Associations. In many instances where these fee's are due, it is part of the agreement you must pay for and agree to prior to close of escrow. These associations can go both ways as far as being beneficial, some home owners have a real problem living with some of the restrictions and people who enforce them. By law you must be given these documents and you should review them early in the stages of an offer with contingencies.
• Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building.
11. Water Quality and Quality Certification
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. Certification is a MUST in most areas.
12. Local Improvements
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. In some case these are referred to as (LID's & ClD's) and your agent should have knowledge of these in the area.
13. Land Transfer Tax
This tax is applied whenever property changes hands and the amount that is applied can vary.
