Hidden Fees to Consider When Buying a Home

Before purchasing a home, it is prudent to look behind the deal as to the hidden costs which you are liable to pay. It will increase your total budget at the last minute. First, select a home of your liking and once you are satisfied with the location, cost, and structure of the house, then arrange for funding. The most common way of raising funds to purchase a house is by way of mortgage. The process of getting a loan sanctioned and disbursed is a long one as many formalities need to be fulfilled.

Be ready with all the documents to save time. The title deed should be changed first to enable you to get the loan. You will come across a variety of fee that you might have to pay. That is why it is necessary for you to keep yourself updated on what documents are needed and the various fees to be paid before you can apply to get a mortgage loan.

You should also understand the period of instalments and the rate of interest your loan carries. All this information along with the loan estimate will be made available to you by the financial institution within three working days on receipt of the loan application.

Let’s discuss some of the hidden costs.

Appraisal and Inspection Fee

Before any finance institution sanctions your application, they will need to assure themselves that the property is in good condition. They will look at the age of the house, its structural foundation, locality, market value and more. An independent third-party will appraise the house and send a report to the institution as to the feasibility of sanctioning the loan. A one-time fee will need to be paid for this service.

While the appraisal is usually an external team, the inspection is an internal one. The financial institution will send its team to inspect your home. They look at the home site and see that the structure of the house is sturdy.

Credit History

The financial institution analyzes credit history to identify any associated risks before sanctioning your loan. A good credit score helps you to get a low loan interest rate. While the fee for this is not very high, it is better you take everything into account.

Title Fee

When you purchase a home, the title of the property needs to be transferred to your name. This entails a fee to be paid to the lender.

Document or Processing Fees

Since creating the legal document is a time-consuming process, institutions charge a fee for the time they have spent on it.

HOA Fees

In certain communities, the institutions or banks charge association fees once you become the owner of the home. This varies depending on the locality.

Loan Origination Fees

This is the biggest fees you need to pay before the loan is disbursed. The lender charges 1% of the total loan amount. Insurance fees also need to be paid to the lender so that the lender is insured for the loan.

Property Tax

Finally, you have to take into account the property tax to be paid to the municipality when you become the owner of the house.

Whether you’re looking to buy or sell in the Kamloops area, for a greater probability of success you need a dedicated professional. I can guide you through the process and be counted on to protect your investment!

Categorised in: Buyers, Kamloops, Real Estate

This post was written by kamloopshomesearchcom