Quicken Loans - The Easiest Way To Get A Home Loan



Find and Compare Real Estate Agents

facebook Twitter RSS

Home > Home Buying Tips > Get to know the cost of buying a home

Home Buying Costs: Get to Know the Cost of Buying a Home

One of the most overlooked factors in the process of buying a home for many people are the costs that traditionally accompany that purchase. Far too frequently many people overlook, or are completely unaware of the various home buying costs they will need to cover in connection with the purchase of their new home. As a result, they may find themselves unable to complete the transaction or at the very least hard pressed to come up with the required cash. By taking the time to acquaint yourself with these home buying costs before you begin the home buying process you can make sure you are educated and prepared.

Appraisal Costs - These are the costs that are typically paid in order to obtain a fair market value of a home. In order for the mortgage company to approve the loan, an appraisal must be performed. These fees can also be important for tax purposes. Average: $225-$450

Credit Report Costs - Before your lender can make a decision on your loan he or she will want to review and verify your credit report. This costs money and the fees are usually charged to you in connection with your loan. Average: $15-$30

Document Preparation Costs -These are the home buying costs that are paid to your attorney, broker or lender for the preparation of documents.

Down Payment - This is the amount of money in cash that you pay at the closing toward the purchase of your home. The amount of this fee can vary widely depending on the type of mortgage you obtain.

Escrow Fees - You may be required to pay money into escrow either before the closing or while you are paying down your mortgage; depending on your lender and the terms of your contract with the seller. Escrow fees are associated with the provision of this service.

Home Inspection Costs - Your lender may require this to make sure that the home is in good working order. This can also serve to protect you should there be anything wrong with the house that would persuade you to back out of the deal before buying the house. Average: $225 to $450

Homeowner's Insurance Costs -Generally, most lenders require insurance on the property before you can actually take possession. These fees vary according to the size of your home and the insurance company. Average: $300 and up.

Legal Fees - These are the home buying fees you may pay in connection with any consultation you receive from an attorney regarding your transaction.

Notary Public Charge - In order to verify your identity you will need a notary.

Pest Inspection Fee - While this won't necessarily be required if you are purchasing a newer home, if you are buying an older home you will need a pest inspection.

Points or Origination Fees - In order to lower the interest rate on your mortgage you may wish to buy what are known as points. Each point represents one percent of the mortgage value. The more points you pay, the lower your interest rate should be. In some cases you may be able to persuade the seller to pay the points for you. Average: 0-2% of the mortgage amount.

Private Mortgage Insurance (PMI) - This insurance may be required if the down payment you are paying is less than 20% of the value of your home. Depending on circumstances you may need to pay up to as much as one year of premium at the closing.

Property Taxes - Depending on your situation, you may owe some property taxes instantaneously when you purchase your home. This might occur if the seller of the property has paid them upfront covering the period of time in which you will actually own the property. For example, if your were closing on your home purchase in July, you would be required to reimburse the Seller for August and September taxes that were paid by the seller as part of a quarterly set of taxes that were paid at the beginning of June.

State Recording Fees - These fees depend on state requirements but may be charged in order to record the transaction. Average: $50 to $150

Survey Costs - A survey may be required in order to determine the exact boundaries of the property. You won't need to pay for this fee if an existing survey can be used. Average: $150 to $400

Tax Service Fees - This service is to ensure that your real estate taxes are paid.

Title Insurance - This insurance covers you if it turns out that the home seller did not actually own the property you bought. Average: $175-$875

Underwriting Fee - Underwriting is the process that is used by lenders in order to evaluate your creditworthiness and income as well as to determine the value and quality of the property in order to make a decision regarding lending. Average: $195 to $795.

Unfortunately, even the above home buying costs are not an exhaustive list. Therefore, keep in mind that the costs of buying a home are more than just the price you agree to pay for it. Knowing you'll need to take into account the other home buying fees will help you to find out how much you can really afford to buy a home.



Buy House and Sell House Fast Back to Buy House and Sell House Fast

Home  ::  Home Buying  ::  Home Selling  ::  Home Mortgage  ::  Real Estate Investor  ::  Foreclosure  ::  Real Estate Service 

Bookmark Us  ::  Submit URL  ::  Resources  ::  Terms of Use  ::  Privacy Policy  ::  Site Map  ::  Contact Us 

Copyright © 2005 - 2022 All Rights Reserved.