You’re ready to buy a home, you’re all excited and your focus is on the down and figuring out what your monthly mortgage payment is going to be. So, it's easy to overlook some of the fees that come along with a home purchase. Here are some overlooked fees and what they could cost you.
1. The Home Inspection
A home inspection helps protect you from purchasing a home that could be in disrepair. So this is an important step to take when you buy a home. Inspectors look for things such as structural issues, mold, and leaks. They should assess the condition of the roof, gutters, water heater, heating and cooling system. This inspection will cost between $300 and $500, and even if you end up not purchasing this home, you still need to pay the inspector.
2. Appraisal Fee
The appraisal report goes to your lender to assure it that the property is worth what you're paying for it. Nowadays appraisals are not a major concern as they were a few years back when it was difficult to get the value needed. An appraisal can take about 2 hours and costs between $300 and $600.
3. Application Fees
When you apply for a loan, the lender is going to run your credit report and charge you an application fee, sometime combining this fee along with any application fee they may charge. This can run $75 to $300. Be sure to ask for a breakdown of the application fees before you have the lender run your credit.
4. Title Fees
These fees, often called garbage fees, cover a title search of the public records for the property you're buying, notary fees for the person witnessing your signature on documents, government filing fees, and more. These can cost between $150 and $400, and it's important to get a line item for each cost.
5. Lender's Origination Fees
Your lender will charge you this upfront free for making the mortgage loan. This includes processing the loan application, underwriting the loan, and funding the loan. These fees are quoted as a percentage of the total loan you're taking out and generally range between 0.5 to 1.5%.
6. Private Mortgage Insurance (PMI)
When you put down less than 20% on your new home, the lender requires that you purchase PMI, which is a policy that protects the lender from losing money if you end up in foreclosure. So PMI is a policy that you have to buy to protect the lender from you. PMI rates can vary from 0.3% to 1.5% of your original loan amount annually.
7. Tax Service Fee
This is the cost (about $90) to ensure that all property tax payments are up to date and that the payments you make are appropriately credited to the right home.
Always ask questions when it comes to understanding the fees you're paying. Discuss them with your lender or real estate agent and determine if you can negotiate any of them down. Don't be afraid to price shop to ensure you're getting the best value.
If you have any questions, call me and I will help you. If you know of someone looking to Buy or Sell Real Estate in El Dorado County call me, text me at 530-306-3494 or email me at firstname.lastname@example.org. Visit my website at PlacervilleRealEstate.com