Whether you're buying your first home, trading up to a larger one, downsizing, or searching for an investment property, there are many costs that you should be aware of when purchasing a home. You should take the time to make sure that you have included these additional costs into the purchase price of your home as they can impact your monthly payment.
- Real Estate Taxes – tax rates vary from city-to-city, and town-to-town. They are based on estimated value of the home x tax rate / 1,000. Know what your estimated taxes are and calculate that into your monthly payment.
- Homeowners or Hazard Insurance – The lender will require you to have a minimum coverage to protect their interest (loan amount). Your cost will vary depending on your coverage selections, and where your home is situated. For example, if you are on the coast or in a flood zone, your premiums will be much higher.
- Improvements or Betterments Assessed on The Property – this could include installation of town water or sewer, or even installation of sidewalks where the cost of improving the property is assumed by the home owner. These fees will pass with the land.
As a buyer, you will also incur closing or settlement costs when you purchase a home. Costs will vary depending on the purchase price of the home and the amount you are borrowing. Your lender will provide you with a good faith estimate on your closing costs to help you determine approximately how much money you will need to have available at closing.