Most of the time people assume that all the money you had available will be used for the down payment on your home. The down payment then helps you determine how much your monthly payments would be. However, aside from the value of the property plus mortgage there are other expenses involve in home-buying and this includes closing costs, moving expenses, cost of repairs, painting, and other improvements. Buyers often incur significant costs to get financing, purchase a home, and then move in. These can include:
Moving Expenses
Moving expenses is considered as a reasonable cost for moving yourself and your property. These costs include a storage unit, moving van, house personal hunters insurance trips, and meals during the move. People wishing to claim these deductions should keep good documentation of all potentially qualified expenses. Worse yet, only some of these will be deductible for tax purposes.
Points
Points are a one-time charge that may be negotiated with the lender, usually to lessen the interest rate you have to pay over the life of your loan. Mortgage companies like that because you are paying them their portion of the mortgage right upfront. One point equals 1% of the loan amount. The more points you pay, the lower your mortgage rate. So, if the mortgage percentage rate is lower the more points that you have to pay.
Title Search
There is a fee to have the ownership of the property you are buying investigated to assure you and your lender that the seller is the legal owner of the property and that there are no outstanding claims or liens against the property that you are buying.
Title Insurance
This is an insurance policy that protects you in case someone over claims to own the house and land that you desire to buy. Most lenders require a title insurance policy to protect the lender against an error in the results of the title search. If a problem arises, the insurance covers the lender’s investment in your mortgage. The cost of the policy (a one-time premium) is usually based on the loan amount and is often paid by the buyer. However, you may negotiate with the seller to pay all or part of the premium.
Casualty Insurance
You will have to pay the first premium on the fire and casualty insurance on the home you are buying. Casualty insurance has a broad category of coverage against loss of real estate property, damage or other liabilities. Casualty insurance includes vehicle insurance, liability insurance, theft insurance and elevator insurance.
Legal Fees
You will have to pay a fee to the attorney who represents you in the house purchase and who reviews all the documents. Expect a fee anywhere from plus, depending on the part of the country and the complexity of the transaction. Be certain to discuss the fee in advance.
Recording and Filing Fees
These fees vary from state to state and even from country to country. Have your attorney give you an estimate. You will have to pay to have the deed recorded as well as any mortgage you give.