The Fees Involved in Buying a Home

When buying a home, most people focus on how much it costs and what
interest rate they can get on the loan. While that is certainly very
important, the other fees that come with buying a home are often
overlooked. Here is a list of the most common fees involved when buying
a home.

• Private mortgage insurance: If you only provide a small down
  payment, you may be required to purchase private mortgage insurance.
  Sometimes this means you are required to pay a full year’s worth at
  time of purchase, or it will be rolled into your monthly payment.
  
  
  
  
• Homeowner’s insurance: When borrowing money to purchase
  a home, insurance is required. In many cases, this means buying a
  policy before closing on the home.
  
  
  
  
• Title insurance: This insurance covers you in the
  unlikely case that the person who sold you the house didn’t actually
  own it or if information on the title was false.
  
  
  
  
• Appraisal fees: An appraisal is needed so that a current fair market value for your home can be established for tax purposes.
  
  
  
  
• Escrow fees: During the closing process, an escrow
  account will usually hold the money while the buyer and seller finalize
  the agreement. In addition, you’ll probably have a portion of your
  monthly mortgage payment go into escrow in order to pay for property
  taxes and insurance.
  
  
  
  
• Points or origination fees: An origination fee is paid
  to the bank or lender for their services in creating the loan. A point
  is 1 percent of the loan, and is often worked into the total cost of
  the loan.
  
  
  
  
• Credit report fees: In order to secure a loan, the lender will require a verified credit report.
  
  
  
  
• Document preparation fees: The lender or broker will usually have a fee to cover the preparation of the required documents for the loan.
  
  
  
  
• Survey fee: If an existing survey of the land cannot be
  obtained, a new survey will have to be conducted in order to determine
  exact boundaries of the property.
  
  
  
• Pest or mold inspection: While not generally required
  for a brand new home, the purchase of an older home may require an
  inspection for pests such as termites as well as mold. This requirement
  can vary by location.
  
  
  
  
• Property taxes: In some cases, you may owe some
  property taxes immediately if the seller has already paid taxes for a
  time period where you will be the owner. Also, there may be other
  municipal taxes or fees for sewer or water that need to be taken care
  of.
  
  
  
  
• State recording fees: Depending on where you live, there may be a fee required for recording and holding the information regarding the sale.
  

Keep in mind that not all of these fees will always apply. Some may
be waived or paid for by the lender or seller. Even so, it is important
that you understand what the fees are and who is responsible for paying
them before finalizing the purchase of your new home.