Buyer's Potential Expenses:
The Cost of Buying a Home
Mortgages, Loans, and Lending:
origination fees. The lender will charge fees for originating your loan, normally 1% of the borrowed amount. They may also charge for processing the loan, application fees, discount points, the appraisal, etc. All lenders have their own prices. Get an estimate from your loan officer and expect a "Good Faith Estimate" of their charges once you have established an accepted offer.
generally 6% of the purchase price, which is paid by the seller. In rare instances, a buyer may be asked to pay his share (3% or whatever is negotiated) of a commission, i.e. seeking a For Sale By Owner property.
This is required if you finance your purchase. The seller will purchase a policy for you and you will purchase a policy for your lender. The cost of the coverage is set by the state, determined by the purchase price of the property. Title Insurance protects you and the lender against issues of improper ownership or transfer. The title company will research the title for any encumbrances affecting the title, such as: liens, judgments, and/or easements, any clouds on the title that may affect the ownership rights.
Title Company Fees:
split equally between buyer and seller. The title company will charge a fee for the preparation of the closing documents, holding of funds, and making sure that all necessary conditions are met prior to releasing money or transferring title.
Property Taxes/Home Owners Insurance:
your bank may ask you to pay a few months in advance if they will be paying these expenses on your behalf through escrow.
Homeowner Association Fees:
if there is an HOA governing the property, it is possible there may be a fee to transfer from one owner to the next.
Inspections and Evaluations:
inspection costs may include the following; termite, structural or general home inspection, an appraisal, surveys, etc. We recommend you hire licensed professionals to help you with your concerns and conduct inspections regarding the physical condition of the property.