10/12/2020: Closing and Other Costs When Purchasing a Home
This is the twelfth in a series of videos and articles inspired by Mars Bank’s First Time Homebuyer live events. Sign up today for our free online first time homebuyer seminar.
Many people don’t realize that beyond your purchase price, there are closing and other costs when purchasing a home. These must not be overlooked. At the very beginning, your realtor is going to ask you for a deposit, also known as hand or earnest money. It’s important to note that this is going to range from just a few hundred dollars to a few thousand. It depends on the negotiation between you and the owner of the property. The buyer needs to be prepared to pay the hand or earnest money.
Another buyer expense is inspections. This is an out-of-pocket cost which is paid before the closing. That is why it’s important to budget for it when preparing to start a home search. The price for a home inspection can be between three hundred to one thousand dollars.
Appraisal and Other Fees
There are a number of costs that make up closing costs including:
- An appraisal fee – Typically around five hundred dollars. The home is appraised to ensure that the home value is in line with the sale price/mortgage amount.
- Prepaid taxes – Property taxes are paid as part of the closing costs. This means there will be an additional cost beyond the purchase price.
- Homeowners insurance – Another cost at closing is one year of homeowner’s insurance which must be placed before the closing occurs.
It’s important to be prepared financially for these and other expenses related to purchasing a home. If you want an estimate of potential expenses for your future home, contact us! Mars Bank wants to help you understand the home buying process.
To get started, contact Mars Bank today.
Considering a first home purchase? Sign up today for our free online first time homebuyer seminar.