Perhaps the most common thing that new homeowners will notice is just how many additional costs come with purchasing a home. Yes, most homeowners expect to pay the cost of the home along with a down payment. However, there are additional fees beyond these well-known costs.
The Home Inspection
Although most sellers will conduct their own home inspection before placing it on the market, it’s not always wise to take their word for it. Therefore, before you officially close on the home offer, your real estate agent will suggest that you hire a home inspector of your own. Doing so can save you tons of money & headaches if he/she ends up finding out something negative about the home that wasn’t in the initial inspection provided by the seller. Note that a general inspection can cost you a few hundred dollars with more in-depth inspections such as pests and plumbing, raising the price a tad more.
You’re Not Just Paying the Mortgage
When real estate agents present you with a monthly mortgage, they are not taking into consideration other expenses such as property taxes and insurance. For example, if you’re paying $900 a month for your mortgage, after taxes and insurance costs, that number can be well within the one grand mark. This is why it is important to budget for not only the mortgage payment but the overall cost.
Closing Costs
Once you have gone through the negotiations, home inspection, and everything in between, signing should be the end of the fees, right? Not exactly. Once you close a deal, then your real estate agent gets working on how much you’re going to pay for in closing costs. These fees are related to the lender, appraisal of the property, interest, attorney fees & the title of the home. You will most likely pay about two to five percent of the total cost of the home.
There’s no doubt about it; purchasing a home is a very big deal for most people. Therefore, it is important to understand every aspect of the home buying process, especially the areas where you’re going to need to pay.