Purchasing a new home is a goal for most individuals, but it is not something that comes easily. When you buy a home, you pay for much more than just the listing price of the house. There are many additional expenses that can cost you thousands of dollars and may surprise you. Here are several home-buying expenses that come with purchasing a new home.
When you place an offer on the home, you also pay a sum of money, which is known as earnest money. This is simply a deposit that shows the seller that you are serious about purchasing the home. This amount can vary and you may want to pay more than expected if there are other potential buyers interested in the home. Luckily, this money will become part of the down payment.
While the cost of the home inspection may be included in your closing costs, you can still expect to pay a few hundred dollars for this step in the home-buying process. In fact, most home inspections cost between $200 and $600, depending on the size of your home. Many individuals may choose to skip the home inspection to reduce their costs, but this is one expense you definitely don’t want to skimp on.
Many buyers don’t realize that they must pay for the appraiser. When an appraiser comes to the home, they inspect and evaluate the home to determine its value. This is essential before the bank will give you a loan. When purchasing a home, your lender will likely hire and schedule the appraiser for you. Although, you will be responsible for the cost of their visit. This expense typically costs at least $300.
Origination fees are charged by the lender. This is basically the way the lender pays itself for processing your loan and making sure it is in place. This fee will vary by the lender but it is usually between 0.5% and 1% of the loan amount. While 1% doesn’t seem like much, homebuyers must consider the large cost of the loan. For example, if you have a $200,000 loan, you will pay approximately $2,000 in loan origination fees. Many home buyers may not even realize they are paying these large amounts, as these fees are often included in the final closing costs.
If you are ready to purchase a new home in Collingwood, contact an experienced real estate agent today. They can walk you through the home-buying process and answer any questions you may have about terminology, processes, paperwork, and more.