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 additional costs the come with purchasing a home. Keep reading to learn more.
Loan Origination Fee
This 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. Figure it will roughly 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.
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 and 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%.
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. 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. Generally the cost for an inspection is $350-$450.
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 as 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.
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. You will receive a loan estimate from the lender three days before closing. You may be able to negotiate some of the fees. Ask your real estate agent to help walk you through all the items on the closing cost list.
However, you can save yourself thousands of dollars in fees by choosing Venture One Realty. 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!
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