First Time Home Buyers: Beware of these Costs

If you’re considering making the transition from renter to homeowner, you already know you’ll need money for a down payment (unless you’re a rare individual who can pay cash for your first home.) But as you save money to achieve your goal, keep in mind that you’ll encounter other less-obvious expenses. You may be aware of some of these. For instance, you probably know that if you get a mortgage, you’ll be required to carry an Indianapolis Homeowners Insurance policy. Don’t let the following expenses blindside you!

Home Appraisal Fee

You may love a home so much that you’re willing to sign on the dotted line and agree to whatever price the seller is asking for. If you are financing your purchase with a bank loan, though, your lender will want to make sure the home it’s about to loan you money to buy is worth the price it’s about to lend you. You’ll need to hire a certified appraiser to provide a home valuation. Expect to pay anywhere from $250 to $600.

Home Inspection Fee

You may trust that a seller has been forthcoming about the condition of your potential dream home. Don’t! The $200 to $600 you will pay a home inspector to uncover hidden problems with your potential home is well worth it. If the inspector finds problems (and he probably will find at least minor issues), you can negotiate with the seller for a lower price. If the inspector finds catastrophic problems and the seller is not willing to have them repaired, you can walk away and breathe a sigh of relief that you have avoided buying a money pit.

Closing Costs

You’ve probably heard the term “closing costs” but may not know what these costs are. Closing costs include administrative fees, any homeowner’s association fees that must be paid upfront, taxes, and attorney fees. They can add really add up! According to the U.S. Census Bureau, if you are eyeing a home that costs around $335,000 and plan to put 20% down, expect to be hit with closing costs ranging from $6,500 to more than $16,000! First time home buyers: beware of these costs in advance!

When you’re ready to buy a home, call Walker & Associates Insurance at (888) 760-7292. The first time you’re faced with buying homeowners insurance, the process can be confusing. We are here to help. We’ll craft a policy that protects you, and explain what it all means.