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These are 8 fees you really need to prepare for when you're getting ready to buy a home. You don't want to find the perfect home, only to realize you can't afford it after all the various fees are accounted for.
Buying a home can be a stressful experience for many reasons. One of the things buyers really get worked up about is unexpected fees. Today, we want to cover 8 common fees you'll run into when buying a home, so you're not taken off guard when you encounter them!
When most people prepare to buy a home, they figure out how much of a down payment they are going to need, but aren't aware that there will be additional fees. These fees can add up to as much as 3% of the purchase cost, which is often an unpleasant surprise for buyers. If you're purchasing a $500,000 home, not only will you need $50,000 for a 10% down payment, but you'll need $5,000-$15,000 in additional fees! These include:
- Property taxes: These are prorated, and you'll split these fees with the seller based on your date of close.
- Hazard insurance: Most lenders are also going to require you to prepay a full year of hazard insurance.
- Interest: Depending on when you close, you could pay up to a full month's worth of interest up front.
- PMI: If you put less than 20% down, you might be subject to credit mortgage insurance.
- Title insurance: These are typically split, with the seller paying for your policy, while you buy title insurance for the lender.
- Escrow fees: These are usually split with the seller.
- Loan origination: This depends on your lender.
- Loan discount: If you're trying to get a lower rate, you may be able to pay some upfront fees to get one.
These are 8 fees you really need to prepare for when you're getting ready to buy a home. You don't want to find the perfect home, only to realize you can't afford it after all the various fees are accounted for.
There are a handful of ways you can reduce these fees, such as a seller credit, which we would love to discuss with you! If you have any questions about this topic, or would like real estate assistance of any kind, don't hesitate to give us a call or shoot us an email. We would love to be your real estate resource this year!
