You’ve been dreaming for this your whole life and it’s finally here. You’re ready to buy your first home! While it’s fairly easy to figure out what your mortgage costs will be, it’s a little more difficult to estimate all of the hidden costs that come with purchasing a home. There are a variety of costs that are going to be involved in buying a house, including taxes, estate agent fees, closing costs and down payments, and more, so it is important that you are aware of what surprises may arise, so you can best prepare yourself. Keep reading to learn more.
Loan Origination Fee
This hidden cost of buying a home can be a very large expense, depending on the lender and the size of your mortgage. It is the fee paid to your lender for all the work involved with making the loan. It will roughly amount to a half to one percent of the total mortgage. Budget accordingly because sometimes this must be paid to the lender up front or when your mortgage has been approved.
Agent Fee
Your agent should be knowledgeable of the housing trends and availability in the market, as well as lead you through all the paperwork and requirements for making a purchase. In most cases, it is the sellers who pays the fees, so you won’t have to pay this expense out of pocket. However, when you work with a reputable agent from Venture One Realty your agent fee will be drastically less because our listing commission fee is only 1% vs the traditional real estate commission structure of 3-6%. Make sure you take this into consideration and don’t get stung with a hidden fee from your real estate agent.
Inspections
After the offer has been accepted, your first big expense is the home inspection. The lending company is going to want to make sure a thorough home inspection has taken place. However, this money will be money well spent for you. It is the home inspector‘s job to find any problems in the home and inform you of them before you buy the house. These can be hidden costs within themselves. Your agent will help you hire an inspector who will provide you a report that will include a comprehensive report on the status and safety of the structure. You may need to also get an additional radon test and termite test if your home inspector does not offer these services, which could be another hidden cost if it is not offered as part of the service and you require it for your sale. Generally the cost for an inspection is $350-$450. Conduct thorough research, work with a reputable inspector, and ensure that you read the small print regarding their services, so you don’t get the horrible surprise of more hidden costs.
Insurance and Taxes
Please don’t forget that when you are using any mortgage calculator it is only calculating your mortgage payment to the bank. It is not including your taxes and insurance costs that will be added to your mortgage for your total monthly bill. You’ll pay the title insurance at the time of purchase, and your homeowners insurance payments will go on and last as long as you own the home, they may even rise over time. Depending on where you are located, you could be required to have flood and/or natural disaster coverage.
Closing Costs
According to Zillow, home buyers pay between 2 to 5 percent of the purchase price of their home in closing fees. So for a house costing $350,000, the fees will be between $7,000 and $17,500. Your lender will provide you with an estimate of fees three days before you are due to close. You may be able to negotiate some of the fees. There will be a variety of items on the closing cost list. You should ask the realtor that you are working with to walk through everything you need to know.
However, you can save yourself thousands of dollars in fees by choosing Venture One Realty without any hidden costs to be worried about. We are a full service real estate brokerage firm offering 1% commission fees. Back to the $350,000 example above the Venture One Realty fee would be $3,500 vs the traditional real estate agency fee of $10,500! A $7,000 dollar saving!
MAKE AN APPOINTMENT WITH VENTURE ONE REALTY TODAY
