Whether you’re looking to buy your first home, or trading up to a larger one, there are many costs – on top of the purchase price – that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you’re not informed and prepared.
Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it’s better to know about them ahead of time so you can budget properly.
Remember, buying a home is a major milestone. Whether it’s your first, second or tenth home, there are many important details to address, during the process. The last thing you need are un-budgeted financial obligations cropping up hours before you take possession of your new home.
“The last thing you need are un-budgeted financial obligations cropping up hours before you take possession of your new home.”
Your lending institution may request an appraisal of the property which would be your responsibility to pay for. Appraisals can vary in price from approximately $250 - $400.
Depending on your down-payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.
Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan.
Any new utility that services your hook up, such as telephone or cable, may require an installation fee.
Mortgage Loan Insurance Fee
Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will most you between 0.5% - 3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.
Mortgage Brokers Fee
A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.
The cost for a professional mover can cost you in the range of:
$50 - $100/hour for a can and 3 movers, and
10 - 20% higher during peak demand seasons.
Condos charge monthly fees for common area maintenance such as grounds-keeping and carpet cleaning in hallways. Costs will vary depending on the building.
Water Quality and Quality Certification
If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water.
If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by thousands of dollars. One example of this is the Mello-Roos tax.