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Home Buyer's Expenses and What You Need to Know About Them

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By : marco benavides    99 or more times read
If you are involved in buying a home, then you already know that there are expenses involved. Perhaps you have already hired a real estate agent, and you know that you will be paying him/her a certain amount that you prearranged. Your real estate agent has probably told you about paying your mortgage loan and what it involves. You were also probably told about a down payment and that you will need to have around 20% of what the house costs.

In today's tight lending market, mortgage lenders are being much stricter about the things that they require. If you are going to put down less than 20% of the price of the house, then you will have to take out Private Mortgage Insurance or PMI to cover your mortgage in case of disability, involuntary unemployment or death. Your lender is simply looking for a way to recover the loan in the event that one of the listed things should happen, which will prevent you from meeting your payment obligations.

Lender requirements and fees will not stop there, and you can expect different fees and costs from different lenders. If some of the fees are waived, make sure that you are not made to pay for them elsewhere, such as in a higher loan rate. You should always shop around for loan terms and interest rates, and you can ask about fees while you are shopping for the best loan terms.

The list of things that you can be charged is extensive and can include: Origination fees, processing fees, credit report fees, application fees, underwriting fees, tax service fees, commitment fees, inspection fees, loan lock fees, broker fees, and administrative fees. Along with all of these fees, you can also expect to pay discount points. That is why you need to look around and find out who offers the best terms and fees.

Oftentimes a lender will offer what looks like a very decent mortgage rate on the surface. However, when you read the fine print, you may notice that you might even be charged miscellaneous fees, as if you were not already being charged enough fees to begin with.

And you can add taxes and fees that are owed to the state to the mix, which might even include a sales tax. It is up to the individual states to set the amount they will charge and whether they will charge a sales tax on a property transfer. Since things are up to the individual states, you can expect laws to vary from state to state. It would not be a bad idea to become familiar with the laws in your county and state even if you have a good real estate agent.

If your agent is really good, make sure you ask all the questions you need answered about costs and expenses. You are going to need to know how much cash you are going to need on hand at closing. Whatever you do, if you are not buying a new house, make sure you have some spare cash for any of the repairs that you will have to do to the house, and older houses always need some repairs, no matter how good their condition is.
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