Costs associated with the purchase of a home.
Understanding the costs of buying a home can be challenging for a buyer. The total amount paid for a home doesn’t end at the purchase price. There are many additional expenses that will be included in the final amount you’ll spend to close on a property and its important to have advanced knowledge of how much you’ll be required to bring to the table. Buyers must be prepared to finance all the costs associated with getting a loan/mortgage which includes but is not limited to closing costs, appraisals, inspection and title costs and more. Both buyers and sellers have costs to pay, although the majority of costs fall on the seller. But before closing a buyer should prepare for cost associated when buying a home for cash or with a loan. Here are a few possible costs to consider when buying a new house for a loan or cash. Most fees will be laid out in the contract you sign to buy the home:
Down payment: A buyer that does not qualify for zero down payments will be required to pay a percentage to purchase the home.
Earnest Money: Paid to the seller to confirm a contract, and is usually refundable.
Inspection costs: An inspection done by professional checks everything in the home and safeguards against any issues that may arise.
Appraisal Costs: The appraisal of a home will be done to make sure the home is valued or worth what it is selling for and can be charged at before or after closing.
Repair costs: Fixing issues in the home may be required in order to qualify for a loan.
Extensions: Most contracts have a specific amount of time to close; passing that deadline may require a fee to extend the closing.
Lender’s Title Insurance: The Lender requires this fee to protect the loan a home and the title.
Processing Fee: Some lenders may include a small processing fee for the loan
Origination Fee: Charged by the mortgage bank/lender to complete the loan.
Flood Certification: Additional insurance for homes in the event it is located in a flood zone.
Interest: The first payment due on a loan is paid on the 2nd month, but buyer is still paying interest for the first month by paying at closing.
Mortgage Insurance: Required on most loans and protects the lender from the buyer defaulting.
Closing Fee: Charged by the title company and sometimes split between buyer and seller.
Recording Fee: After closing, the title and other documents have to be recorded.
HOA fee: A property with an Home Owners Association requires a transfer fee
Taxes and Transfer Fees: Depending on location of the property, taxes may be due and paid by seller or buyer.