When you buy a home you know that you are making a big financial commitment—probably the biggest in your life. But are you aware that the cost of owning a home is much bigger than what the price tag might say? Indeed, many first time TSW Real Estate Group home buyers do not know about the “hidden” costs that go along with buying a home.
What are “Hidden Costs”?
Many things that we buy have “hidden costs;” but while we call them “hidden” even though they really out in the open, we just don’t think about them at first. For example, when you buy a car the final dollar amount you pay is going to include not only the ticket price but also the registration and licensing fees. Over time, too, that vehicle will continue to cost money—even if you paid cash for it—via things like oil, fuel, tires, antifreeze; you know maintenance.
Closing Fees
Buying a home, though, has so many more fees and “hidden costs.” For example, here is a list of fees you will probably have to pay when you close the deal on the home purchase.
- Appraisal Fee: cost to have an appraiser analyze the worth of the home
- Credit report fee: cost charged by the lender for running your credit report
- Flood life of the loan Fee: to have the government track the flood zone status of your home’s outlying property
- Government recording charges: the cost for both local and state governments to make record of your deed, your mortgage, and your loan documents
- Lender’s Origination Fee: charged to process your loan application. This can be upwards of $800 on a $97,000 mortgage with an interest of 5.5 percent (and no points).
- Tax Service Fee: charge to ensure the previously paid taxes (before you take over ownership) are up to date
- Title Services and Lender’s Title Insurance: fees associated with the home’s title
Other Fees and Costs
In addition, there are still even more fees and costs that you could pay even before
you get to start thinking about closing. This might include:
- Home Inspection Cost: your mortgage insurer may require this but even if they don’t it’s a good idea to pay the few hundred dollars for this inspection. It could save you thousands of dollars in repairs after you move in.
- Survey Costs: your lender might also require a professional survey of the land to ensure that you know your boundaries, acreage, etc.
- Moving Costs: this is one of those costs that is not associated with “buying” the home but is something you will likely pay for (and whose cost you will probably overlook).