The Costs of Buying a Home
When buying a home, there are several costs you must take into consideration throughout the process.
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If you’re considering buying a home, which costs do you need to be aware of so that you’re financially prepared when you do make the decision to buy?
The first and largest home buying expense you should be aware of is the down payment. However, there are FHA loans available that only require as little as 3.5% down, and you can also get conventional loans that go as low as 5%.
The next biggest expense is your closing costs. The first closing cost you’ll have to pay is your loan fees, or the fees your mortgage professional charges to process your loan. There could also be an origination fee, an appraisal fee, and a processing fee. You’ll also have escrow fees as part of your closing costs, and these can be big because you have to escrow for your taxes and insurance for the year. The closing attorney will determine how much of that you’ll put into escrow, and you’ll pay your escrow fees the day of the closing.
Next up is the inspection fee. Home inspections are vital, as is finding a good home inspector. These inspections usually cost between $500 and $700. If and when the inspector finds any issues that need to be fixed, you and your agent would ask the seller to correct them, so most of the time, the home inspection pays for itself.
Sometimes, you’re also required to pay an HOA fee or a transfer fee. This can range from a couple hundred dollars to 0.5% of the purchase price. You also might have to prepay the monthly HOA fees.
Lastly, additional expenses include moving costs, new furniture costs, and utility transfers.
If you have any more questions about the costs of buying a home or you have any other real estate needs, don’t hesitate to reach out to me. I’d be happy to help you.
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