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Five costs to keep in mind when purchasing a home

Five costs to keep in mind when purchasing a home

“Renters today who are saving for an upcoming home purchase should keep in mind the total cost of home-ownership.

Other than a mortgage, keep in mind these five costs when planning for a monthly home budget:

1. Home Inspection – While the cost of home inspections can vary, the typical range is between $300-$500 according to the US Department of Housing and Urban Development. Always attend the home inspection, it will only take two to three hours and you will learn a lot about your new home.

2. Closing Costs – Closing costs include many fees: Realtor commission, loan fees, loan interest, multiple types of insurance, title charges, notary fees, filing fees, and more. Calculate the closing costs with your lender when you get pre-qualified to make sure you understand exactly how much cash you will need at closing.

3. Appraisal Fees – When you have the value of the home you are purchasing assessed, hire a state-licensed or certified appraiser. The mortgage company can often suggest an appraiser. This fee can be included in closing costs, but this is not always the case. Like all other fees, appraisals will vary, but a typical range is $300 to $450.

4. Property Taxes – Property taxes vary widely by jurisdiction and are often due twice a year. It is the main tax supporting local schools, government, fire and police protection and more. Property taxes vary widely across the country and can even be quite different within cities.

5. HOA fees and higher utilities – It’s important to find out if the neighborhood or complex you are moving into serves a Homeowner’s Association Fee. These fees cover maintenance, shared areas such as pools, gyms, and clubhouses and more. When making the transition from renting to owning, remember to calculate the difference in utility bills. If your new home is larger, utilities will be more expensive. Also, landlords often pay utilities such as water and trash removal.”

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