KNOWLEDGE CENTER

June 28, 2022

Hidden Costs to Consider When Buying a House

Purchasing a home is one of the biggest decisions you will ever make in your life. There are many costs to consider, both one-time and recurring. In this blog post, we will discuss a number of hidden costs that are often overlooked when buying a house. Keep these in mind as you begin your house hunting process, so you can be prepared for all of the expenses involved! These are all fees that you will need to pay at the time of closing on your new home. Be sure to factor these in when budgeting for your purchase! 

Appraisal fees

An appraiser will come to your home of choice to determine its value. This is important for the bank, as they will be lending you money based on the value of your home. There is usually a fee for this service, which is typically around $300-$400.

Home inspection fees

A home inspector will look for any potential problems with the property. This is an important step in the process, as it can help you avoid purchasing a home that needs extensive repairs.

Settlement or closing fee

This is a fee charged by the company handling your real estate transaction. The fee is typically a few hundred dollars.

Credit report fee

When you apply for a mortgage, the lender will pull your credit report. There is usually a small fee charged by the credit reporting agency for this service. The lender carries this fee forward to you as a sunk cost.

Document preparation fee

The lender will charge you a fee for preparing the typically rigorous paperwork that accompanies a mortgage. This is typically a few hundred dollars.

Loan origination fee

As you buy a house, you will be taking out a loan. The bank or other financial institution that provides this loan will charge you a fee for originating the loan. This fee is generally a percentage of the loan amount and can range from zero to several thousand dollars.

Title fees

There are a few different fees associated with the title of your new home. The first is the title search fee, which is charged by the title company for researching the history of the property to make sure there are no outstanding liens or claims. The second is the title insurance fee, which protects you (and the lender) in case there are any problems with the title. The third is the escrow fee, which is charged by the title company for handling the paperwork and funds associated with the purchase.

Ready To Buy A House In 2022?

If you are thinking about buying a house, be sure to factor in these hidden costs. With a little bit of planning, you can avoid any unwanted surprises down the road. A reputable loan officer or real estate agent should be able to help you estimate these costs so that you can plan accordingly. Our team is one of the most experienced real estate professionals and we would be happy to help. Get in touch today!  

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