Having a house that you can call your own is a big accomplishment. But getting one is not an easy task. Experts say that all for-sale houses come with a hefty price tag. But there’s more to the actual price of the home than you might think. That’s why it’s crucial to learn the actual cost of homeownership before you sign up for any deal.
Mortgage payments
Your monthly home loan payments are the most predictable expenses that you’ll encounter when buying a home. That’s because mortgage payments will remain the same until the end of your term. But what most first-time homebuyers do not know is that your mortgage payment isn’t the total sum of what you owe every month.
Closing costs
When checking the property listings in Wichita and other areas, a down payment is one of the expenses that usually takes a considerable chunk of your budget. Aside from the appraisal fee, you also need to think about the survey fee and the wire transfer fee. Underwriting and origination fees should also be a part of your budget. You must also cover the recording fees, as well as the title insurance.
Private mortgage insurance
The mortgage company may require you to get private mortgage insurance if you’re only putting less than 20 percent down on a property. Most people commonly refer to it as PMI, which is often presented by a private mortgage insurance company to help lenders if ever a borrower defaults on their loan.
Homeowner’s insurance
When buying a house, home insurance is one thing that you can’t forget. It’s a policy that combines hazard insurance with personal liability insurance to cover a house together with its contents in case of a calamity. Most of the time, lenders will ask you to buy a property before you close a deal on the home. You’ll need to pay the first year’s premium costs directly to your insurance company. Doing so will guarantee that you’ll have insurance ready before you close the deal. Once you’ve completed the first year’s premium, you can then combine it with your home loan payments.
Appraisal fees
You need an appraisal to ensure that you can establish the home’s current fair market value for tax purposes. It’s a document that justifies the price paid for a real estate property, based on the sales of other properties within the area. The lender needs this document to ensure that the property is worth the amount that you’ll be borrowing from them.
The appraisal fee is only a one-time payment that you need to pay the lender upfront before they can provide you with the appraisal document. It’s important, especially if you want to buy a specific property within the area.
These are only a part of what the actual cost of a property should look. It’s best to work with a realtor so that you’ll know the other fees you need to pay before buying a home. Doing so will ensure that you’ll have enough funds to cover every expense associated with your future home.
