Feb

Extra Costs to be Aware of Before Buying a Home

By admin

Whether you are looking to buy your first home, or trading up to a larger one, there are many costs
- on top of the purchase price – that you must figure into your calculation of affordability.
These extra fees, such as taxes and other additional costs, could surprise you with an unwanted
financial nightmare on closing day if you are not informed and prepared.

Some of these costs are one-time fixed payments, while others represent an ongoing monthly or
yearly commitment. Not all of these costs will apply in every situation, however It is better to
know about them ahead of time so you can bud-get properly.

Remember, buying a home is a major milestone. Whether It is your first, second or tenth home, there
are many important details to address, during the process. The last thing you need are unbudgeted
financial obligations cropping up hours before you take possession of your new home.

Read through the following checklist to make sure you are budgeting properly for your next move.

1. Appraisal Fee

Your lending institution may request an appraisal of the property, which would be your
responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 300.

2. Property Taxes

Depending on your down payment, your lending institution may decide to include your property taxes
in your monthly mortgage payments. If your property taxes are not added to your monthly payments,
your lending institution may require annual proof that your taxes have been paid.

3. Survey Fee

When the home you purchase is a resale (vs. a new home), your lending institution may ask for an
updated property survey. The cost for this survey can vary between $190 – $1,000.

4. Property Insurance

Home insurance covers the replacement value of your home (structure and contents). Your lending
institution will request proof that you are insured as it protects their investment on the loan.
Beware! Some homes may not be insurable. Make sure you have an insurability clause in your
purchase contract.

5. Service Charges

Any new utility that services your hook up, such as telephone or cable, may require an
installation fee.

6. Escrow and Document Preparation Fees

Escrow fees are split between the buyer and the seller in Colorado. However, additional fees will
be charged for the buyers mortgage closing. This can include first and second mortgages. In
addition to the Doc Prep fees charged by the lender, some lenders will e mail the loan documents
and therefore the escrow or title company may charge a electric to paper fee.

7. Mortgage Loan Insurance Fee

Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type
of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually
payments are made monthly in addition to your mortgage and tax payment.

8. Mortgage Brokers Fee

A mortgage broker is entitled to charge you a fee in order to source a lender and organize the
financing. However, it pays to shop around because many mortgage brokers will provide their
services free to you by having the lending institution absorb the cost.

9. Moving Costs

The cost for a professional mover can cost you in the range of:

Originally posted 2009-04-20 16:04:55. Republished by Blog Post Promoter

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