The thought of buying your first home can be very exciting. You know that it is a financial commitment you will bear but the TSW Real Estate Group investment is more than just about money. A home typically means you have found stability—a dependable job with a steady income—and an opportunity to start assembling what you believe to be the best life for yourself. You have options, when you own a home.
But while it is easy to sit and calculate how much home you can afford, make sure that you do not ignore all the “hidden” costs associated with home ownership, especially if this is your first home.
What Do You Mean By “Hidden” Costs?
Ok, first of all, nobody is trying to hide these costs from you. These are actually things that you will have to pay for eventually but might not be aware of. Consider buying a car, for example. There is a sticker price, but you can negotiate that. What many people overlook—particularly if they have never bought a car before—is that you also have to pay for transfer of title, sales tax, registration, and then maintenance.
Owning a home is very similar. You have to pay certain costs at the time of sale as well as throughout the lifetime of ownership.
What Are Closing Fees?
Closing fees, for example, is just one of the types of hidden costs you might have to pay. Everyone who buys a home pays them so it is perfectly normal, just be aware of them. But here is a much more comprehensive list of fees and other costs you may not know about:
- Appraisal Fee—this is the cost of having an appraiser come out to analyze the value of the home you want to buy
- Credit Report Fee—this is the cost charged by a lending institution just to run your credit report
- Flood Life of the Loan Fee—this is the cost you pay for requesting the government track the flood zone status of the property you are considering buying
- Government Recording Charges—this is the cost for both state and local governments to make a record of your mortgage, your deed, and your loan documents
- Lender’s Origination Fee—this is the cost you pay just to have your loan application processed
- Tax Service Fee—this is the cost of ensuring the previously paid taxes on your property are up to date (so you don’t have to pay them).