What are the first things that come to mind when you’re changing houses? Maybe you’re thinking about all the delivery charges that come with shifting your decor. Or perhaps you’re worried about whether the rent is too high. But we’re sure you haven’t thought about the hidden fees that are lurking in the shadows of
What are the first things that come to mind when you’re changing houses? Maybe you’re thinking about all the delivery charges that come with shifting your decor. Or perhaps you’re worried about whether the rent is too high. But we’re sure you haven’t thought about the hidden fees that are lurking in the shadows of you buying or selling a home.
Lucky for you, we’ve already covered all of that here. Let’s jump right in!
Hidden Fees When Buying a Home
Hidden Fee #1: Earnest Money When Buying A Home
Before you sign off to buy the house of your dream, your dealer will ask you to pay earnest money. What’s that, you ask?
Earnest money is given to show the dealer that you’ll come through on the offer. By providing upfront, the seller can rest assured you’re going to buy that house. Now here’s where you need to be awake; you can either get this money back, use it on the house, or never see it again.
It all depends on what your contract says. Typically, the average earnest money is between $500 to $1,000.
Hidden Fee # 2: Closing Costs When You’ve Bought A House
While it’s a great idea to save money for a down payment, it’s not the only thing you should be saving up for. When you’ve bought a house, there comes a wave of closing costs to sweep you from your feet.
When your real estate transaction is coming to an end, you’ll have to pay mortgage origination fees, recording fees, surveys, and so on! Moreover, these are about 2 to 5% of the original price of your house.
Hidden Fee # 3: Escrow Account
Now when the closing process is going on, you’ll be introduced to an escrow account as well. These need to be pre-funded and include about a yearly portion of your taxes and insurance.
Not just this, but your lender may ask you to pay a little higher to cover insurance and tax expenses that go up.
Hidden Fee # 4: Down Payment
Another surprise for first-time homebuyers is the down payment. Maybe not the word ‘down payment’ itself but the amount.
It’s not necessary your seller may require this, but most do. These usually vary from 3% to 3.5% depending on the loan you choose.
Hidden Fee # 5: Home Maintenance And Repair
Despite sounding pretty ordinary, your home maintenance and repair costs play a vital role in emptying your pocket.
Typically, you’ll have to end up paying at least 1 to 4% of your total house value to house maintenance and repair. It might be something a small thing like changing your house’s lock to something bigger, like changing your roof. At the same time, you’ll never know when a repair creeps up on you.
For this, you should save up some money and keep it aside. Better yet, once you assess the house you want, you’ll have a better idea of how much repairing or maintenance might take. A yearly average is anywhere between $2,000 to $8,000.
Hidden Fee # 6: Property Taxes
With the myriad of costs, you have to pay for buying a home; it’s pretty hard to keep every cost in mind. One thing that new buyers often forget is property taxes. Especially since your dealer will tell you it adds to what you pay for a monthly mortgage.
While your real estate agent may include it in your escrow account, there are chances they might not. Besides, these may not take a considerable part of your pay or the might. It partially depends on the area you’re buying a home or selling a home in Washington in.
Mostly, it depends on the reassessment of your property by the county. If your house’s value increases, your home is going to be worth more. Thus, you’ll have to pay a higher property tax and cover-up for the previous month. Plus, the increase in property tax means expediting monthly mortgage payment too.
From finding a trustworthy agent to estimating your budget, there’s a lot that needs to be done when buying a home. With all this, it’s easy to forget all of these hidden fees. Once you keep these pointers in your mind, it’ll be easier to find a house that doesn’t disappoint!