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3 Closing Costs That Most Buyers Forget to Factor in and What You Can Expect to Pay

August 6, 2015 by George Duarte

3 Closing Costs That Most Buyers Forget to Factor in and What You Can Expect to Pay If you’re in the process of buying a home, you probably have your deposit and monthly mortgage charges in a spreadsheet, along with a chart of your other expenses and your monthly income. But when it comes to buying a home, there are lots of different costs that will come into play – and it’s easy to forget something. When you’re preparing to close on your new home, make sure you consider these three closing costs that most buyers forget.

Home Inspection Fees: A Small Charge For Peace Of Mind

Most home purchase agreements are contingent upon a successful home inspection – and if you’re planning to buy a home, you should definitely have it inspected before you buy it. However, home inspectors don’t work for free, and you’ll have to pay a home inspector for a thorough evaluation of the premises.

Home inspection fees depend on the kind of property you’re buying, and can vary depending on your location. For a condo unit, you will typically only need to pay about $250, but a single-family home might cost up to $500. Luxury properties are often more expensive, sometimes even running as high as $1,500.

Private Mortgage Insurance: Obligatory With Small Down Payments

If you’re only planning to make the minimum down payment on your home, you’ll need to buy mortgage insurance. Mortgage insurance protects the lender in the event that you default on your loan. This is an added cost that your lender pays, and in general, almost every lender will pass the cost on to you.

You can pay for your mortgage insurance in one large payment, or you can add it to your monthly mortgage payments. Note that if your down payment is less than 20% of the purchase price, you’re legally required to buy mortgage insurance.

Lender Fees: Additional Fees to Process Your Mortgage

One category of closing costs that buyers often forget is lender fees. Lender fees are fees that your mortgage lender will charge for processing the transaction of the loan. These can include appraisal fees, credit report fees, processing and application fees, and administration fees for underwriting.

These fees can range depending on the lender, but in many cases they exceed $3,000. You’ll want to budget about $3,500 to $5,000 to be safe.

Buying a house is a major undertaking, and there are lots of ways that the process could go awry. But a good mortgage professional can help you navigate the process and get the home and the mortgage you’ve always wanted without any issues. Contact your trusted mortgage expert to learn more.

First-time Home Buyers: Why Splurging for a Larger Home Beats Condo Living

July 31, 2015 by George Duarte

First-time Home Buyers: Why Splurging for a Larger Home Beats Condo Living Some first-time home buyers are on a tight budget when making their real estate purchase, and there may be an inclination by many to purchase a smaller property, such as a condo, rather than the home they truly want. While there may be some initial financial benefit associated with buying a smaller property, there are a few benefits associated with splurging and buying a larger home as a first purchase. By analyzing these benefits, first-time home buyers can make a more informed decision about how to proceed.

Costs Associated With Upgrading In The Future

Some people will purchase a smaller property initially with the goal of later upgrading to a larger property. This can provide the home buyer with the initial benefits of building equity, taking advantage of tax benefits associated with real estate ownership and more. However, there are costs associated with selling property, including closing costs, real estate fees, make-ready and improvement costs and more that should be considered.

Benefits Of Long-Term Ownership

For many, there will be a need to have a larger property over the years, such as when starting a family or when young children grow into teenagers who need more space. When the first property purchased is large enough for the family to grow into, the homeowner can enjoy long-term appreciation and equity growth. More than that, the higher value of the property may mean that there is more upside for property appreciation over the years.

Getting Established In A Community

In addition to the financial benefits associated with investing in a larger property initially, there are intangible benefits. Moving into a new home in a few years means that there is a need to get re-established in a community. When a home buyer settles down into a larger home that he or she plans to stay in for many long years or even decades, getting established and settled in the community can begin right away.

These are considerable benefits that can be enjoyed when a first-time home buyer makes a purchase that he or she plans to enjoy for many years to come, but there are other factors to consider. Each person needs to make a decision regarding a real estate purchase that is best for their needs, goals and financial situation, so there is not a best-fit solution that is right for everyone. Those who are thinking about buying their first piece of real estate should consider contacting their trusted mortgage professional for assistance to determine what they can afford and to discuss the loan process.

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