Fees To Be Aware Of When Purchasing A Home
Several one-off expenses are involved in buying and moving into a new home. When you’re thinking about finances, make sure you plan for these:
- Home inspection: A home inspector will do a visual inspection of the dwelling to identify any defects in the home.
- Closing costs: Closing costs are expenses over and above the price of the property in a real estate transaction. Costsincurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.
- Homeowners insurance: Homeowners insurance is a form of property insurance designed to protect an individual's home against damages to the house itself, or to possessions in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.
- Moving costs
- Connection fees
- Urgent maintenance
- Extra furniture or appliances
- Origination fee: This is a fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan.
- PMI: Private Mortgage Insurance (PMI) Insurance required to be paid for by the borrower to protect the lender in the event payments are not made on time; most often required when the loan amount exceeds 80% of the purchase price.
- Title insurance: Title insurance is an insurance policy that covers the loss of ownership interest in a property due to legal defects and is required if the property is under mortgage.
- Recording fees: The fee charged by a government agency for registering or recording a real estate purchase or sale, so that it becomes a matter of public record. Recording fees are generally charged by the county, since it maintains records of all property purchases and sales.
- Appraisal fee: A home appraisal is an estimate of a property's value. Mortgage lenders require an appraisal on your home before they'll provide a loan for the simple reason that the property is the underlying asset that serves as collateral for the loan. Paying for the appraiser falls in the shoulders of the home buyer.
Purchasing a home is probably one of the biggest decisions you'll ever make. There is a lot to consider and often a lot of questions you would like answered including where to start. You can start with FBFC and our local lenders. They'll be able to walk you through the process, look at your unique situation and form a recommendation, in addition to offering a free pre-approval or second opinion. Not everyone has thousands of dollars hidden in their mattress for a rainy day. If you're one of the millions who don't, FBFC has lending options for you. Click here to learn more about FBFC mortgage lending.