Buying a home for the first time is a momentous time in your life. You’ve managed to secure a mortgage, and you can’t wait to find your dream home. But before you get carried away, don’t forget to consider all the costs involved. Of course, there’s your mortgage deposit and then the following payments. But that’s not the only thing you need to pay for when you buy a house. There are lots more hidden costs involved in buying a home, except that they’re not hidden at all if you do your research. Make sure you know what you’re getting into by familiarizing yourself with these costs.
Before you buy a house, you’ll need to have an inspection performed. Your mortgage lender may require it, but even if they don’t it’s still a good idea. Although it’s an extra cost, it could save you money by picking up on any problems that need repairing. But an inspection could also reveal something that puts you off the sale. So it’s an expense you could find yourself paying out for more than once. However, it’s much better to pay for more than one inspection than in it to sink all your money into a house that’s going to start falling apart at any point.
There can be a whole host of fees you need to pay to your mortgage lender when you buy a house. For example, you might have to pay discount fees for a lower interest rate or a survey fee if the lender requires one. You might use a mortgage broker, you’ll have to pay application fees or processing fees, and you could have to cough up for a credit report too. You could even find yourself paying for courier fees to deliver documents, the cost or wiring money to an escrow account and a check to see if your home is in a flood zone. Make sure you know what you’ll be faced with, so nothing will take you by surprise.
Lawyer and Title Fees
There’ll be money going to the title company or closing attorney you use too. You’ll need to use the services of conveyancing solicitors or a title company to make sure the title on the property is legitimate and to help you get ready to close the deal. You might need to pay for title insurance, filing your property information at the local courthouse or a closing fee.
Don’t forget about the taxes that will be due when you buy. It’s a cost that might be easier to remember compared to others, but you might have to pay it upfront. If you have a down payment less than 20%, you will have to use an escrow account to deposit the money for your property taxes. The account will let your mortgage lender pay the taxes for you, instead of your receiving a bill later. You might also have to put in money for your homeowner’s insurance.
All of the extra costs of buying a home can be a shock, so it’s best to be prepared. Go into the process with your eyes wide open so that you know what to expect.