When buying a home, most Buyers focus on how much it costs and what interest rate they can get on the loan. While that is certainly very important, the other fees that come with buying a home are often overlooked. It is important that you look at ALL fee’s associates so there are no unexpected surprises!!  

 

Here is a list of the most common fees involved when buying a home:

•  Private mortgage insurance: Also know as PMI.  If you only provide a small down payment, you may be required to purchase private mortgage insurance. Sometimes this means you are required to pay a full year’s worth at time of purchase, or it will be rolled into your monthly payment. 
Depending on the bank program, the amount of PMI will vary. 

•  Homeowner’s insurance: When borrowing money to purchase a home, an insurance policy is required. In many cases, this means buying a policy before closing on the home. 

•  Title insurance: This insurance covers you in the unlikely case that the person who sold you the house didn’t actually own it or if information on the title was false. 


•  Appraisal fees: An appraisal is needed so that a current fair market value for your home can be established for tax purposes. 
This is ordered by your bank but paid for upfront by the buyer. Estimated Appraisal Fees are $200 - $500. 

•  Escrow fees: During the closing process, an escrow account will usually hold the money while the buyer and seller finalize the agreement. In addition, you’ll probably have a portion of your monthly mortgage payment go into escrow in order to pay for property taxes and insurance. 
 

•  Points or origination fees: An origination fee is paid to the bank or lender for their services in creating the loan. A point is 1 percent of the loan, and is often worked into the total cost of the loan. 
 

•  Credit report fees: In order to secure a loan, the lender will require a verified credit report. 
 

•  Document preparation fees: The lender or broker will usually have a fee to cover the preparation of the required documents for the loan. 
 

•  Survey fee: If an existing survey of the land cannot be obtained, a new survey will have to be conducted in order to determine exact boundaries of the property.

•  Home Inspection: Hiring a professional Home Inspector is highly recommended.  Inspector will go thru the home prior to Buyer purchasing and provide a report of homes condition and any mechanical or structural problems they find.  Estimated Home Inspections Costs vary from $350 - $750 depending on what inspections are included.  Other inspections you may want to consider within your home inspection are:

Pest/Insect Inspection

Lead Paint Inspection

Mold Inspection

Radon Test

Water Quality/Quantity Test 

•  Property taxes: In some cases, you may owe some property taxes immediately if the seller has already paid taxes for a time period where you will be the owner. Also, there may be other municipal taxes or fees for sewer or water that need to be taken care of. 


•  State recording fees: Depending on where you live, there may be a fee required for recording and holding the information regarding the sale.

 

It is important to keep in mind that not all of these fees will always apply. Some may be waived or paid for by the lender or seller. Even so, it is important that you understand what the fees are and who is responsible for paying them before finalizing the purchase of your new home.

Lastly, when buying a home it is very important that you receive buyer representation.  By hiring the services of a Professional Real Estate Agent this agent will provide you with all the tools necessary to make your home buying experience a pleasurable one!