Photo by (Sujin Jetkasettakorn)
Are you looking at buying your first home? Are you looking at trading up to a larger house? The situation could be any one of these but the fact is that there are extra costs that are involved while you are buying a house. And yes, these costs are over and above the purchasing price. If you are not aware of these costs beforehand, they can come up as a shock to you while closing the deal. There are one-time fixed time payments and then there are monthly or annual payments. These extra costs may vary from one deal to another but knowing about them can help you get a more accurate idea of your budget.
It doesn’t matter whether you are buying a house for the first time or the fifth time, what matters is that there are a lot of things that you need to consider so as to avoid any unexpected extra financial burden. Here are a few costs that you should consider while planning your budget for buying a house:
A bank often requires that your property be appraised. For this you need to pay an appraisal fee that could cost you around three hundred dollars to a maximum.
Your bank may also want to include the property taxes in your monthly mortgage payments. However, this will depend on your down payment and whether you are able to submit a proof on an annual basis that your taxes have been paid
A survey fee is charged when you buy a home on resale rather than buy a new home. This will set you back by at least seven hundred dollars.
You will also need property insurance to cover the replacement value of your home. This includes the structure and the things in your house and is required by your lending institution to make sure that their investment is protected.
Service charges involve the installation fee of services such as cable or telephone that you will need once you move into your new house.
No home purchase should be made without the help of a lawyer who will review the paperwork and guide you along. The legal fees may vary depending on the experience of the lawyer and the kind of legal expertise that is required.
There is also a mortgage loan insurance fee that you may be required to pay depending on the equity in your home. The costs are higher than 3% of the total mortgage amount and the payments are added to your monthly mortgage payments.
A mortgage broker may also charge you a fee to get you a lender and to arrange for financing your home. This may not always be the case since often brokers do not charge you anything and in fact they get their fees paid by the mortgage institution itself.
You cannot, of course, forget about the moving costs. It will cost you a minimum of $50/hour for a van and three movers and the charges will be higher when the demand for movers is high.
There will be monthly or annual maintenance fees that you will be required to pay once you shift into your new home. These can include grounds keeping and carpet cleaning and will vary depending on the building.
Water quality and quantity certification may be required if your new house is serviced by a well. A fee may be charged for this but this totally depends on where your new house is located.
Your property taxes can go up by thousands of dollars if the town has made some local improvements such as addition of sidewalks or building of a proper sewer line.
When property is transferred from one person to the other, you have to pay a land transfer tax. The amount of this tax, however, can vary depending on the area that you live in.
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