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| How Much Should I Expect to Pay on
Closing Costs? |
|
Whether you're looking to buy your first home, or
trading up to a larger one, there are many costs - on top of the
purchase price - that you must figure into your calculation of
affordability. These extra fees, such as taxes and other additional
costs, could surprise you with an unwanted financial nightmare on
closing day if you're not informed and prepared.
Some of these costs are one-time fixed payments, while others
represent an ongoing monthly or yearly commitment. Not all of these
costs will apply in every situation, however it's better to know
about them ahead of time so you can budget properly.
Remember that buying a home is a major milestone. Whether it's your
first, second or tenth home, there are many important details to
address during the process. The last thing you need is unbudgeted
financial obligations cropping up hours before you take possession
of your new home.
Read through the following checklist to make sure you're budgeting
properly for your next move. |
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Appraisal Fee |
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Your lending institution may request an appraisal
of the property, which would be your responsibility to pay for.
Appraisals can vary in price from approximately $175 -$300. |
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Property Taxes |
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Depending on your down payment, your lending
institution may decide to include your property taxes in your
monthly mortgage payments. If your property taxes are not added to
your monthly payments, your lending institution may require annual
proof that your taxes have been paid. |
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Survey Fee |
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When the home you purchase is a resale (vs. a new
home), your lending institution may ask for an updated property
survey. The cost for this survey can vary between $700- $1,000. |
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Property Insurance |
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Home insurance covers the replacement value of
your home (structure and contents). Your lending institution will
request proof that you are insured as it protects their investment
on the loan. |
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Service Charges |
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Any new utility that services your hook up, such
as telephone or cable, may require an installation fee. |
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Legal Fees |
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Even the simplest of home purchases should have a
lawyer involved to review all paperwork. Shop around, as rates vary
greatly depending on the complexity of the issues and the experience
of the lawyer. |
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Mortgage Loan Insurance Fee |
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Depending upon the equity in your home, some
mortgages require mortgage loan insurance. This type of insurance
will cost you between 0.5% -3.5% of the total amount of the
mortgage. Usually payments are made monthly in addition to your
mortgage and tax payment. |
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Mortgage Brokers Fee |
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A mortgage broker is entitled to charge you a fee
in order to source a lender and organize the financing. However, it
pays to shop around because many mortgage brokers will provide their
services free to you by having the lending institution absorb the
cost. |
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Moving Costs |
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$50-$100/hour for a van and 3 movers, and 10-20% higher during peak
demand seasons. |
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Maintenance Fees |
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Condos charge monthly fees for common area maintenance such as
grounds keeping and carpet cleaning in hallways. Costs will vary
depending on the building. |
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Water Quality and Quality Certification |
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If the home you purchased is serviced by a well, you should consider
having your water checked by your local experts. Depending upon
where you live, determines whether or not a fee is charged, to
certify the quantity and quality of the water. |
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Local Improvements |
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If the town you live in has made local improvements (such as the
addition of sewers or sidewalks), this could impact a property's
taxes by thousands of dollars. |
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Land Transfer Tax |
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This tax is applied whenever property changes hands and the amount
that is applied can vary. |
