Wouldn’t it be ideal if every home buyer only needed to pay the price on their mortgage label? In reality, there are several hidden costs attached to home loans. You may also need to create an escrow account in conjunction with your mortgage to accommodate these costs. This is done to safeguard the lender if the home owner does not pay the extra charges timely and fully. Here are some of the main additional expenses you may need to consider when budgeting and deciding on your new location:
- Appraisal Fees – It’s imperative for home buyers to have their homes appraised before finalizing any home loans. You can have this conducted by a certified appraiser. The appraisal is important as it documents all the attractive features of your home, and assesses your property’s worth. You can have one done for $250 to $600.
- Closing Fees– These are charged once you’ve closed the deal. This could cost you up to 5% extra to your mortgage fees. Your lender could use these fees to pay your homeowners association fees upfront, or it may go towards legal fees.
- Homeowners Association Fees– If you’ve decided to buy property in a gated community, or a planned development, you will need to join the Homeowners Association (HOA). If your closing fees do not include HOA, you’ll be required to pay annual or monthly fees here. HOA fees go towards the maintenance of certain parts of the property.
- Homeowners Insurance – Always obtain insurance quotes from companies who are highly reputable with coverage, claims, and financial stability. Homeowners insurance is imperative, as it can include liability insurance, medical coverage for guests if they are injured on your property, coverage for loss of use, as well as coverage for your personal belongings. Loss of use coverage is useful if you need to move out of your home temporarily, while your home is being fixed. This coverage includes your expenses and home loan. Insurance quotes can also include dwelling coverage, which pays for home repairs.
- Property Taxes – These taxes are calculated according to the worth of your property, as well as any of your surrounding land. It’s usually determined by your municipal government. Property taxes are usually used for services such as the building of schools, infrastructure, rescue teams, road works, policing, or for removing leaves and snow. Rates here may differ per state, and are updated annually by a tax assessor.
Home buying should be an exciting time for you with little to no surprises. At Southern Oak, we will do everything we can to ensure you have a smooth home buying process. Give us a call today for a free quote, and let us help you start a new chapter. Click the button to get a free and quick homeowners insurance quote.