Potential Surprises
There's more to buying a home than the cost of the home. Consider these costs to avoid being unpleasantly surprised:
- Title Insurance – This insurance is hundreds of dollars and is required on all mortgage loans.
- Escrow Fee – There is always an escrow fee that runs into hundreds of dollars. Depending on the type of loan, the seller may pay some or all of these costs.
- Appraisal Fee – Usually about $300 to $400
- Interest – Sometimes you need to pay additional interest if your loan closes before the end of a month.
- Credit Report, Flood Hazard, Wire Fees, Tax Service, Recording Fees, Reconveyance Fees and more...
You will be given a Good Faith Estimate of Settlement Costs when you apply for a mortgage loan. It is an estimate only. As you become nearer to closing on your home purchase, it is a good idea to revisit Settlement Costs with your lender or escrow company to avoid unpleasant surprises.
Obtaining a Home Inspection is another great way to avoid an unpleasant surprise. A licensed inspector ensures you are buying a safe home, much like taking a used car you're considering buying to a trusted mechanic to have it checked out.
Frequently, a seller will provide a home warranty to the buyer. A home warranty will protect the major appliances in the home for the first year after purchase. A water heater, air conditioner, pool and the like can be included in the warranty. This request would be made at the time you place an offer on a home.
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