It’s hard to imagine that owning your own home can be a financial inconvenience. After all, a home is where you have your peace of mind, build your family, and make further plans for your life. However, owning a home doesn’t come without cost even if you inherited it. There are so many costs attached to it, and you may be ignorant of how much it’s taking out of your pocket on a monthly or yearly basis. So what are these costs? Keep reading and I will share with you seven costs of a home that can keep you broke!
Number 1: Upfront Costs
As we know, the buying process of a home can be long and tedious. What many people don’t know is that the cost of the home itself goes beyond the price tag.
If you’re a first time homeowner, then it is important to calculate the total amount it will cost you to finalize the entire process. The first cost are appraisal fees. You will want to know how much the house is worth prior to bidding and if you want an appraisal, it will cost you as much as $500.
The second expenditure is earnest money otherwise known as your deposit and this ranges between 1% and 3% of the selling price of the home. It is paid upon acceptance of the seller and will ultimately go towards the down payment on the home. Finally, there are the inspection fees. You want to ensure the house is in good working order before you buy it right? Well an inspection will cost you between $300 and $500.
Number 2: Closing Costs
This is the amount of money you will pay at the closing of the transaction. When a real estate deal is closed, it means that the title of the property has been transferred from the seller to the buyer. Unfortunately, closing costs only add to the upfront costs you have already paid in your house buying adventure. So what closing fees can you expect?
Closing fees are dependent on a variety of factors. These include the area where the home is located, the nature of the property, and the loan you take.
Common closing costs include the application fee which is the fee that is charged by the lender to process your application. Before you submit your application, be sure to ask the lender exactly what would be covered by this fee. It may include your credit…