Wednesday, October 05, 2011
Question:
In addition to the mortgage payment, what other costs do I need to consider when buying a home?
Answer:
When you purchase a home, the majority of the costs are associated with your loan. In addition to your loan fees (origination fee, appraisal, credit report, flood certification, tax service fee, pre-paid interest and any additional loan fees) you will be looking at a closing fee by the title company of $100-$200, lender’s title insurance policy fee of around $150-$500 (based on lender requirements), any fee for a survey that you ordered, a loan closing fee from the title company of $300-$400, any fees for your inspection if you decide to order one, (typically $250-$500), recording fees/transfer charges of $200-$400), homeowner’s insurance, prorated Homeowners Association dues and working capital contribution as well as any legal fees if you decide to hire an attorney to represent you.
In reference to your carrying cost, as they say there are only 2 things in that you can count on in life, death and taxes. So, included in your monthly mortgage payment will be an estimate of 1/12 of the taxes that will be owed that year. Your lender will also want to make sure you have insurance in case something happens to the property since that is their collateral. The lender will let you pick the insurer, but they will collect 1/12 of that amount in your payment as well. The acronym for everything is PITI for principal, interest, taxes and insurance.
-Cam Boyd
