Home investments are moments that can define and change lives. It is a milestone that identifies how far you have reached in life. Young couples and adults believe that home buying is a challenge that should be handled with lots of care and concern. The moment you kick-start this process, you are likely to be overwhelmed with many questions and confusions. With this being said, there are five important costs you must consider before making that final offer.
#1 Mortgage Charges
First of all, are you aware of your mortgage charges? Mortgage charges can be paid using a wide range of options. Payment possibilities range from scheduled payments (weekly, bimonthly or monthly) to amortizations to termed loans. When you decide to buy a home and apply for a loan, you should ensure that the right figures are in your hands. Professional lenders will make sure that the idea of buying a property doesn’t blind you. They will keep giving you the right figures! Few other important mortgage charges to consider would be “interest adjustment rates”. By definition, interest adjustment covers the gap between your first payment and the closing date. The adjustment charges can be avoided if the first payment and closing date are a month apart. Mortgage insurance is another charge associated with loan repayments. It would be great to compare several life term insurance policies before signing the final deal.
According to experts, the latter always turns out to be a better deal.
#2 Mortgage Insurance
Mortgage insurances always begin with 5% down payment. Some lenders increase to 20% or lessor. Mortgage insurances can have a one-time charge of 2.75%. Most of the time, insurance payments are included to the actual principal. This will increase the amount of money you repay.
You have so many premiums and down payment choices to go through. Study your options before finalizing a deal.
Moving on, you must inspect the property. This is a must for old homes, resale properties, and older models. On an average, you must spend between 100 to 200 USD per hour. Some home inspectors charge less for smaller properties. That is because smaller properties need lessor time (few hours) to be inspected. Most of the time, old properties take between five to ten hours for inspection. In addition to property inspection, you must take care of the “survey”. By definition, the survey checks if the property is built to plan. You should spend between 700 and 1500 USD on the survey. Some banks cover these charges.
#4 Disbursement and Legal Costs
Another important cost to be considered before making that final offer would be “disbursements and legal charges”. These charges depend on the location. You must plan between 1500 and 3000 USD on legal charges and disbursements. Hire an attorney to help you with these charges. It is always good to ask an attorney how much you should pay. The title insurance is also important. It takes care of undischarged mortgages and survey problems. These problems are common with resale properties. Optional title insurance costs between 200 and 500 USD.
#5 Repairs and Replacement
Last but certainly not least, you must be prepared to pay for repairs and replacements. Most of the time, real estate agents will take you through the property with small paint-jobs, carpentry works, and fixtures. You should take a pen/paper and picture all the repairs. These repairs should be passed to the home inspector. They will help you with an estimate of all repair items. Likewise, you must figure out the replacements. Often, home buyers replace curtains and rugs. In fact, drapes in re-sale properties can never satisfy buyers. These are major home replacement items.