Potential Hidden Costs When Buying A Home
What Are The Potential Hidden Costs When Buying A Home?
Have you made the important decision to stop renting and purchase your own property? Becoming a homeowner is a serious and exciting milestone, however it is a major financial decision that can be associated with many potentially hidden extra costs. If you are ready to begin shopping for a home and mortgage in the areas of Palm Beach, Tri-County, and Broward County, Florida, CTC Mortgage is here to help you. Continue reading to be better prepared for the potential hidden costs with buying a home.
What Should I Expect To Pay For Insurance?
When you obtain a mortgage, most lenders will typically require you to purchase a homeowners insurance policy. This is intended to cover any financial losses caused by damages that occur to your home and also includes liability insurance to pay for medical expenses if someone is injured on your property. If you obtain a loan that is insured through the government, such as an FHA or VA loan, you will be required to pay a mortgage insurance premium, (MIP). If you obtain a conventional loan, and make a down payment of less than twenty percent, you will be required to pay private mortgage insurance, (PMI). These insurance policies will financially protect a lender if the borrower defaults on a loan and does not make the required payments.
What Kinds Of Fees Are Required With Closing On A Home?
When you are in the process of finalizing the purchase of your home, you will find that there are many associated costs that you will be responsible for paying, therefore, you will want to save enough money for both the down payment and the closing costs in addition to the cost of mortgage payments. Closing costs will typically include the price of a title and title insurance search, the cost of a home appraisal to determine the home’s value, a loan origination fee to cover the underwriting process, as well as escrow and attorney fees. It is important to note that if you opt to have the property inspected before the purchase, you will also be responsible for that cost. Depending on the type of home you buy, you also may need to pay for homeowners association (HOA) fees and you will be required to pay property taxes.
Budgeting For Home Repairs And Relocation Costs
After you have paid closing costs and finalized the purchase of your property, you will need to account for other costs, including moving expenses if you plan to hire a moving company. You will more than likely need to budget for potential costs of new furniture, appliances, paint, etc. Additionally, a significant difference between renting and buying a home is that homeowners are responsible for maintenance and repairs of the property, which can be a substantial cost. It will be crucial to save funds for unexpected costs of home ownership, including issues that could occur with appliances, leaks, and the structure itself. It is also important to remember that when relocating to a house, the square footage will be more than an apartment, which will increase utility bills.
If you have questions about buying a home in Palm Beach, Tri-County, and Broward County, Florida, contact CTC Mortgage for a consultation.
