Common Hidden Costs That Catch Homebuyers Off-Guard
When a seller accepts your offer on their house, the final price you pay could be much higher when you factor in the hidden costs of buying a home. At Altitude Home Loans, one of our core values is transparency. We’re one of the top mortgage lenders in Tuscon, AZ, and our customers love us because they know they can trust us.
Let’s look at some hidden costs of buying a home that often catches first-time homebuyers off guard.
1. Home Inspection Fees
A home inspection will cost you about $300 to $400, but that’s pocket change compared to the cost of buying a lemon of a house. The cost could vary if you have a larger house or require a more in-depth inspection.
You don’t have to inspect your house to get a loan from us, but we highly recommend it. A house inspection will help you discover expensive problems before investing.
2. Signing Day Isn’t Free
Sitting down and signing the final documents for your first house is an awesome feeling. After your down payment, you might think that your next bill won’t come until the first month of your mortgage, but you must handle closing costs as one of the overlooked house purchasing requirements.
You should expect to pay between 2% and 6% of the loan amount. So, if you’re paying the average price of a home in the U.S., $419,200, you will have to pay between $8,384 and $25,152 for the closing cost.
3. Two Insurance Costs You’ll Have to Budget For
There are two types of insurance you should be budgeting for: homeowners insurance and private mortgage insurance (PMI).
Homeowners insurance protects your home and the assets associated with it. Mortgage insurance protects your mortgage lender in case you can’t meet your payments.
The amount you’ll pay for homeowners insurance depends on your state, though most people should budget to pay a few hundred dollars each month. The average cost of PMI is around 0.46% to 1.50% of the original loan amount per year.
4. Property Taxes and HOA Fees
Property tax is part of your closing costs. It’s a highly variable percentage that’s dependent on your location, as cities and states set their own tax rate for residents. Your home’s value also plays a key role in how much you’ll pay in property taxes.
If you live in a neighborhood with its own community association, you might have to pay homeowners association (HOA) fees. Again, this is a highly variable number, but most associations collect a few hundred dollars per month from residents.
We’ll Walk You Through the Home-Buying Process With Complete Transparency
Choosing a mortgage for first-time home buyers can be scary. This is likely the biggest purchase you’ll make in your lifetime, and you need to know about every cost before you make such a big commitment.
Many people are surprised by the hidden costs of buying a home, but not first-time homebuyers who get their loans through Altitude Home Loans. To learn more about the process and how you can get started, call Altitude Home Loans today at 520-500-1010.