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Lesser-Known Expenses To Be Aware Of When Buying A Home

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Blog by Ray Smiley | November 30th, -0001

One of the most important things that buyers like to be sure and plan ahead of when they are buying a brand new home is how much of money they would be spending for various aspects in this process. As you plan your budget, the main part of your budget is probably going to be the amount of money that you are going to pay for your house itself.

The major mistake that many buyers do is that they stop at this and they don’t go on to giving more room in their budget to allow other expenditure that might occur in your house buying process. Many people are also not aware of the various areas where they might need to pay up as well. In this article we will take you through the other sections in the process of buying a house where you might need to account for some lesser-known costs.

Appraisal fee

When you have a mortgage, your mortgage lender would most probably need to get a home appraisal order to make sure that what you are paying for your house is the right price. A house appraisal would allow the right valuation of the house so that the price paid is not too much or too little for the value at which it stands. The fee for appraising any house would depend on the size of the house and how complex your house’s appraisal would be. However, generally, prepare to take out a few hundreds of dollars for this process. But also bear in mind that some mortgage lenders tend to be generous enough to waive this appraisal fee off the money you have to pay them, so make sure you try your luck by simply asking them for a negotiation!

Property surveying

Some mortgage lenders might make it a requirement for the house to go through something called the property survey. A property survey basically helps people manage the technicalities of the physical structure of any property. It helps you collate the boundaries of the property, the measurements of the area and its structures and other easements.

When a house is being resold, it would usually already have a property survey done in hand. But sometimes the seller might not hold one property survey for their house, or sometimes the property survey conducted might be inaccurate due to some changes over time. In such cases, you might need to get one property survey done on your own and this can come up to at least two thousand dollars or more.

Application fee for lenders

Your lender might ask for a fee just to have your application processed. Ask your lender if there is any of such fees are involved, and keep in mind that such fees can vary from one lender to another. It is hard to mark a price for this application fee for lenders, but perhaps you could again prepare at least a hundred dollars to be safe. Some lenders might again be generous to waive this application fee off, so try asking them to do so!

Mortgage broker fee

If you are under a mortgage broker, then they would definitely require a fee for their help to you. Sometimes a fee is not required though, so bear in mind to ask your mortgage broker straight up to clarify if there are any such fees involved. If not, after you think you have finished your accounts with them, they might once again pop by to speak to you and collect this fee from you which can burst your budget easily.

Mortgage loan insurance

If your down payment for your new property is less than 20 percent of its total sales price, then your lender would require you to provide them a mortgage loan insurance. This is to assure that you do not cause them to have a loss in the process of buying a house. This mortgage loan insurance can usually be added up to your mortgage payments. So if you feel that your mortgage payment seems to be higher than what you had budgeted for and if it seems like an uninformed change, then clarify with your mortgage lender if the insurance value has been added in to this final invoice or if there is still a pending payment for the mortgage loan insurance separately.

Home inspection expenses

It is very important to make sure you conduct a professional home inspection when you are buying your own house. The home inspector would help you look at everything of the house to gauge its quality and standards, starting from the foundation of the house all the way to its ceiling and even rooftops. The report that they provide to you would address any potential areas of concern as well as the estimation of cost to fix any repairs that they recommend. A standard home inspection can cost around $600 but it is crucial that you conduct it for your home to avoid more expenses in the long run due to undetected damages.