Be Prepared for These Sometimes Unexpected Costs at Closing
Check out these sometimes-unexpected closing costs when purchasing a new home.
Your lender will require an appraisal before you can purchase the home. Your lender uses appraisals to check the home is priced correctly, evaluating any recent updates and market conditions. Although the lender orders this, the buyer typically pays this fee. Fees can vary by market or company.
It’s always a good idea to hire an inspector to look at the home you’re considering, and many realtors include this as part of your offer on the home. Home inspectors can find things that might not be apparent to a buyer, such as issues in the foundation, electrical, or plumbing. Plus, a home inspection can give you some room for negotiation. Home contracts typically include a clause based on the results of the inspection, giving you the option to walk away from the purchase, or require the seller to fix any areas that need attention. A home inspection can cost anywhere from $200 to $300, and you may consider additional inspections, such as foundation or radon testing, if you live in certain areas.
A pest professional is a must, especially if you’re purchasing a lived-in home. As the name suggests, they will look for signs of termites or other pests in the home, and will spot things in greater detail. This isn’t usually required, but it is in your best interest.
There are a number of things that can go towards the closing costs, and they all vary by the sale price and contract. They can include any real estate commissions and title work for the sale. To best prepare yourself, closely review the loan estimate and closing disclosure with your lender in advance. By doing this, you can avoid any surprise expenses in the final week of sale.
Your escrow consists of your homeowner’s insurance, property tax, private mortgage insurance (or PMI), flood insurance, and homeowners’ association dues (if applicable). You can expect to pay a first-year premium of your home insurance, and set up reserves for your homeowners insurance and property taxes. It’s also important to remember to start reserves for any other items that are escrowed.
The best thing you can do to alleviate these unexpected costs is communicate with your lender. They’re there to answer your questions and give you advice!
The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.