Many home buyers are not aware of all fees charged that makeup the total cost of purchasing a home. Some of these fees are normally paid prior to closing while others are paid at closing. Fees paid at closing will be itemize on your closing statement which you should receive a copy to review prior to closing. The fees that are lesser known to the general public will be reviewed below:
Inspections of property – As a home buyer who is hiring an inspector to perform an inspection on property that you recently signed a written contract to purchase, you need understand the inspector is not a specialist in all aspects of the property. If the inspector identifies a potential problem such as termites, roof, foundation, and asbestos, etc. you should consider hiring a specialist in that area to further evaluate and advise you on the next step to take. The purpose of hiring an inspector is to prevent you from purchasing a lemon. An inspector inspects roof, gutters, water heater, cooling and heating systems, etc. Cost of an inspection is based on the square footage of house starting at approximately $300.
Appraisal – As a buyer you may need a loan to purchase the property, your lender will order an appraisal of the property. Be sure to check the report for any numbers and/or descriptions that could affect the value of the property. Depending on the size of the house the cost of an appraisal will be $300 plus.
Title services – These fees are the result of a public search to ensure the buyer gets a clear title of property. Also included in these fees’ notary fees witnessing your signature on documents. These fees usually are $150 plus.
Origination fees – The homebuyer will be required to pay a fee to the lender for making the mortgage loan. Charges included in this fee include loan application, underwriting the loan which includes research to approve you for the loan, and funding the loan. The fees charged for this ranges approximately 0.5 to 1.5% of total loan.
Survey - The report produced outlines the boundaries, dimensions and features on the property. Cost of a survey will be $200 plus depending on the size of property.
Private Mortgage Insurance (PMI) – Normally PMI is required if you put down less than 20% on conventional financing of the home. Once the homeowner achieves 20% equity in the property PMI can be dropped from loan payment, or your loan-to-value ratio reaches 22% PMI is automatically dropped. If you finance using a FHA loan then PMI is for the life of the loan. The rate charge will be based on loan amount, term, down payment, and interest rate.
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