Whether you're looking to buy your first home, or trading up to a larger
one, there are many costs - on top of the purchase price - that you must
figure into your calculation of affordability. These extra fees, such as
taxes and other additional costs, could surprise you with an unwanted
financial nightmare on closing day if you're not informed and prepared.
Some of these costs are one-time fixed payments, while others represent
an ongoing monthly or yearly commitment. Not all of these costs will
apply in every situation, however it's better to know about them ahead
of time so you can bud-get properly.
Remember, buying a home is a major milestone. Whether it's your
first, second or tenth home, there are many important details to
address, during the process. The last thing you need are unbudgeted
financial obligations cropping up hours before you take possession of
your new home.
Read through the following checklist to make sure you're budgeting
properly for your next move.
1. Appraisal Fee
Your lending institution may request an appraisal of the property, which
would be your responsibility to pay for. Appraisals can vary in price
from approximately $175 -$ 300.
2. Property Taxes
Depending on your down payment, your lending institution may decide to
include your property taxes in your monthly mortgage payments. If your
property taxes are not added to your monthly payments, your lending
institution may require annual proof that your taxes have been paid.
3. Survey Fee
When the home you purchase is a resale (vs. a new home), your lending
institution may ask for an updated property survey. The cost for this
survey can vary between $190 - $1,000.
4. Property Insurance
Home insurance covers the replacement value of your home (structure and
contents). Your lending institution will request proof that you are
insured as it protects their investment on the loan. Beware! Some homes
may not be insurable. Make sure you have an insurability clause in your
purchase contract.
5. Service Charges
Any new utility that services your hook up, such as telephone or cable,
may require an installation fee.
6. Escrow and Document Preparation Fees
Escrow fees are split between the buyer and the seller in Colorado.
However, additional fees will be charged for the buyer's mortgage
closing. This can include first and second mortgages. In addition to the
"Doc Prep" fees charged by the lender, some lenders will e mail the loan
documents and therefore the escrow or title company may charge a
electric to paper fee.
7. Mortgage Loan Insurance Fee
Depending upon the equity in your home, some mortgages require mortgage
loan insurance. This type of insurance will cost you between 0.5% -3.5%
of the total amount of the mortgage. Usually payments are made
monthly in addition to your mortgage and tax payment.
8. Mortgage Brokers Fee
A mortgage broker is entitled to charge you a fee in order to source a
lender and organize the financing. However, it pays to shop around
because many mortgage brokers will provide their services free to you by
having the lending institution absorb the cost.
9. Moving Costs
The cost for a professional mover can cost you in the range of:
• $50-$100/hour for a van and 3 movers, and
• 10-20% higher during peak demand seasons.
10. Maintenance or HOA Fees
Condos charge monthly fees for common area maintenance such as grounds
keeping and carpet cleaning in hallways. Costs will vary depending on
the building.
11. Water Quality and Quality Certification
If the home you purchased is serviced by a well, you should consider
having your water checked by your local experts. Depending upon where
you live, determines whether or not a fee is charged, to certify the
quantity and quality of the water.
12. Local Improvements
If the town, city or county you live in has made local improvements
(such as the addition of sewers or sidewalks), this could impact a
property’s taxes by hundreds of dollars.
13. Metropolitan or Special Tax Districts
This is a unique tax district set up by the developer to finance all
aspects of the physical infrastructure such as streets, sewer and even
recreation centers or golf courses. The developer only has to put up a
small percentage of monies for these costs and the rest are floated with
bonds and added to the homeowners tax bills until paid off. The
arrangement can work nicely when there are plenty of homebuyers to pick
up the tax bill. But, in a down market, watch out...you could end up
holding the bag when there is not enough buyers to fund the bonds.
Are you looking for Real Estate in Denver Colorado?
Visit http://www.realtyoasis.com to find current information and
resources about home sales in Colorado. Realty Oasis Metro Brokers
offers the top realty expertise and resources to help you find your
dream home. Also check out our current home listings in Colorado at
http://www.realtyoasis.com/listings/residential.aspx. We have extensive
home listings in Parker, Highlands Ranch, Aurora, Centennial and all
cities in Colorado’s Front Range.
About The Author-Mark Eibner is the cofounder and Broker
owner of Realty Oasis. When you hire Mark you also hire an entire team
of professionals. Each staff member performs a specialized part of the
buying and selling process. This support team helped place Mark among
Denver's Top 5 Realtors from 1997 through 1999, and in the #1 position
in 2000. |