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Victoria Cottle

Costs in Hiding when you Buy a Home

Costs in Hiding when you Buy a Home

Looking at buying a home? Here are some costs that are involved in the home buying process that you might not be prepared for but they are “necessary evils”.

  • Home Inspection. Don’t forgo this option available to buyers. The inspection looks at all the major items in the home and produces a comprehensive report which helps you determine whether the home is in good condition or not. The inspection usually costs between $300 to $500.
  • Home Appraisal. Most lenders will require a home appraisal be done if there is not a recent one on record. This report or comparative market analysis gives the lender a concrete opinion of the value of the home. Lenders want to make sure that they can recover the cost of their loan if anything happens to you. Doing an appraisal takes about 2 hours and costs between $325 to $425.
  • Application Fees. All buyers should be pre-approved before they shop for a home. Par of that process is submitting an application and running a credit check. You will be charged for both of these items. The cost is usually between $75 to $300. Always ask for a price breakdown before paying.
  • Title Services. When you buy a home, a new title has to be provided at closing. The title company will run a title search to make sure the previous title is clear of all liens and that it is the property you are buying. They also charge you for all their processing fees. This will cost you between $150 and $400 and should be itemized on your pre-closing copy of the HUD.
  • Lender Origination Fees. Every lender charges you for originating the mortgage loan. This fee includes processing your app, underwriting and funding the loan. You will pay a percentage of the total loan amount you request. Anywhere from 0.5% to 1.5%.
  • Survey. Also required by the title company, this is a report to confirm the boundaries of the property and any improvements such as fencing or shed placement.
  • Private Mortgage Insurance. When your down payment is less than 20%, your lender will require you purchase PMI policy that protects the lender if you default. PMI rates will vary from 0.3% to 1.5% of your original loan amount. You can remove the PMI once you have paid enough of the principal of the loan to gain some equity. Always ask your lender for details about PMI requirements.
  • Tax Service Fee. You will be required to pay the title company to make sure that all the tax payments have been made. You won’t be able to purchase a home with outstanding taxes until the tax lien has been satisfied. If you are buying a foreclosure, you may have to pay back taxes as well as additional fees at closing.

Always ask the lender and title company for a breakdown of their fees. Some of the rates are negotiable or can be bought down with extra cash. Don’t assume you are going to get the whole story upfront. Inquire and dig a little to get your best deal.

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And remember if you, a friend or family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.

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The Victoria Cottle Group
Keller Williams Greenville Upstate
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