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 bud-get properly.
Remember, 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 are
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.
1. Appraisal Fee
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.
2. Property Taxes
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.
3. Survey Fee
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 $190 - $1,000.
4. Property Insurance
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.
Beware! Some homes may not be insurable. Make sure you have an
insurability clause in your purchase contract.
5. Service Charges
Any new utility that services your hook up,
such as telephone or cable, may require an installation fee.
6. Escrow and Document
Preparation Fees
Escrow fees are split between the buyer and
the seller in Colorado.
However, additional fees will be charged for the buyer's mortgage closing. This
can include first and second mortgages. In addition to the "Doc Prep"
fees charged by the lender, some lenders will e mail the loan documents and
therefore the escrow or title company may charge a electric to paper fee.
7. Mortgage Loan Insurance Fee
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.
8. Mortgage Brokers Fee
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.
9. Moving Costs
The cost for a professional mover can cost
you in the range of:
- $50-$100/hour for a van and 3 movers, and other services
- 10-20% higher during peak demand seasons.
10. Maintenance or HOA Fees
Condos charge monthly fees for common area
maintenance such as grounds keeping and carpet cleaning in hallways. Costs will
vary depending on the building.
11. Water Quality and Quality Certification
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.
12. Local Improvements
If the town, city or county you live in
has made local improvements (such as the addition of sewers or sidewalks), this
could impact a property’s taxes by hundreds of dollars.
13. Metropolitan or
Special Tax Districts
This is a unique tax district set up by the
developer to finance all aspects of the physical infrastructure such as
streets, sewer and even recreation centers or golf courses. The developer only
has to put up a small percentage of monies for these costs and the rest are
floated with bonds and added to the homeowners tax bills until paid off. The
arrangement can work nicely when there are plenty of homebuyers to pick up the
tax bill. But, in a down market, watch out...you could end up holding the bag
when there are not enough buyers to fund the bonds.
Are
you looking for Real Estate in Denver
Colorado? Visit http://www.realtyoasis.com to find
current information and resources about home sales in Colorado.
Realty Oasis Metro Brokers offers the top realty expertise and resources
to help you find your dream home. Also
check out our current home listings in Colorado
at http://www.realtyoasis.com/listings/residential.asp. We have extensive home listings in Parker,
Highlands Ranch, Aurora, Centennial and all cities in Colorado’s
Front Range.
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