Moving Expenses You Need to Expect
One thing most home buyers want to know before they begin the home buying process, is what expenses they might encounter throughout this process. The price you negotiate for your new home is just the beginning as there are likely going to be more than a few extra expenses and costs that you will be up against. If you have a set budget, you will need to take the following into consideration:
Appraisal Fee
Your mortgage lender will most likely require a home appraisal in order to ensure that you aren’t drastically over paying for your home. The costs here typically depend on the size of the property and how complex the appraisal will be, but a general ball park figure would be around $150 to $250. Some lenders may waive this fee, so when negotiating with your lender it can’t hurt to ask!
Property Survey
A survey may be another requirement of some lenders in order for them to identify boundaries, lot measurements and easements. In most home resale cases, a survey will already be available. However, if the seller does not have one (or it is not accurate) and you need to get one, it can cost up to $2000.
Lender Application Fee
Again, your lender may require a fee just to process your application. Ask your lender about this one too, as the fees can vary and certain lenders might even waive this fee for you.
Mortgage Broker Fee
If you are using a mortgage broker, they may require an upfront fee. This is not very common, but be sure to ask your broker so you aren’t hit with another unexpected cost.
Mortgage Loan Insurance
Typically if your down payment on your home is less than 20%, your lender will require mortgage loan insurance. This could possibly be added to your mortgage payments, so ask your lender.
Home Insurance:
Your lender will require you to have enough home insurance to cover the total value of your mortgage and your lawyer will need proof of this insurance in order to proceed with the transaction.
Title Insurance
While optional, it is recommended that you get title insurance as it’s typically not very expensive. For $150 to $300 title insurance will give you coverage in case there are issues down the road with your property title. If there are issues and you do not have this insurance, the costs could be very large.
Deposit
Upon making your offer to purchase a home, you are typically required to give a deposit. While this deposit will go towards the overall cost of the home, it will be an out of pocket expense at the beginning of the real estate transaction, so be prepared.
Legal Fees
Your lawyer will be reviewing the terms of your offer as well as taking care of the mortgage, title searches, title registration and adjustment costs. Legal fees can range anywhere from $1,200 all the way to $2,500.
Home Inspection
It is highly recommended that you get a home inspection when buying your next home. Your inspector will look at everything from the foundation all the way to the roof and everything in between. Their report should go over any issues along with estimates on the costs to fix said issues. A typical home inspection can cost up to $600. That’s all before you even move into your new house! Once you get in you’ll likely need to spend even more money on furniture, window coverings and appliances. Buying a home can definitely be an expensive endeavor, so you will want to make sure you are financially prepared for what you are getting yourself into.