13 Things You Can Expect to Pay for Before Buying a House
You might be focused on that big number — the mortgage payment — while you’re looking for a house but don’t forget about all the other costs associated with buying a house. They can pile up and overwhelm you if you aren’t aware of them. Here are some things to know about fees you might face as you buy a house.
An appraisal fee will run around $300 to $500 and will show up on loan estimate or good faith estimate. Most of the time the appraisal fee is paid out-of-pocket but it can sometimes be rolled into closing.
The survey fee takes care of verifying the property lines and making sure fences are in the right spot. A survey fee isn’t required in every state.
Flood Determination Assessment
A flood determination assessment is something that comes up and is usually around $10 to $20 but it’s used by lenders to find out if a property is in a flood zone. Lenders have to get a flood determination assessment to determine if the home has the proper amount of insurance.
The closing fee is paid to the title company, escrow company or attorney conducting the closing. Some states require a real estate attorney be present at every closing. This is a fee that is separate from the escrow deposit, which requires up to two months of property tax and mortgage insurance payments.
A mortgage application is used by some lenders to try to get home buyers committed to them through a $400 to $500 fee. Investopedia calls it an excessive fee and should be avoided.
Credit Report Fee
Mortgage lenders have to run a credit report on you if you’re buying a home and sometimes they’ll try to charge you between $30 to $50 per report.
An origination fee is usually collected after a loan is approved and as part of the closing costs. It is between .5 and 1 percent of the sale price. The origination fee typically covers the cost of paperwork, verifications and calculations to figure out the mortgage.
Each attorney’s rate varies but it’s usually around $400 to have an attorney involved in the loan transaction.
Mortgage Broker Fee
If you choose to work with a mortgage broker it’s going to cost you. A mortgage broker helps you find a loan but they’ll charge you 1 to 2 percent of the home’s purchase price.
Between the time you close and make your first mortgage payment, lenders will likely expect you to pay any interest that accrues during that time. Sometimes you’ll have to pay up front at closing.
Lender’s Title Insurance
Also known as a loan policy, lenders will require it to protect themselves if there is an error in the title search or if there’s a claim of ownership on the property after it’s sold.
Owner’s Title Insurance
There is also owner’s title insurance that a home seller can purchase to protect them in case there are title problems or if there are claims of ownership made on the property.