Is the house you’ve been eyeing for months now available on the market? Do you finally have enough money saved up to buy it? Moments like these are rare and nothing short of a miracle—we bet you feel like you’re at the top of the world!
And we don’t mean to burst your bubble, but have you accounted for the hidden costs of the house?
Yes, you read that right. It’s not just the cost of the house you have to worry about but also a range of other hidden costs as well. Let’s take a look at some of these.
Much like a security deposit, the earnest money is a payment that buyers are required to pay in good faith. The payment ranges from $500 to $2000 depending on the type of house and shows you’re serious about the offer you made for the house. Generally, the money is returned at the end of the purchase if the final signed contract permits it.
Home owner’s insurance
Homeowner’s insurance is combined in the final payment the buyer makes for the house, along with property tax. While it may be a small amount in comparison, the cost of it can go up depending on the variation in the market, which will ultimately raise the cost of your mortgage too.
This will be expressed as a percentage of the property’s value and will vary depending on the location of your house.
It’s calculated after considering the value of your house and surrounding properties, the rate at which the lease will be charged, and the cost of replacing the house if you’re looking to redo it.
Individuals are expected to pay an annual interest rate of 3 to 5 percent on their house. However, the rates are volatile and can change depending on your income, your credit score, debt, the length of your mortgage, as well as down payments.
Private mortgage insurance
Individuals who don’t have a 20 percent down payment are required to pay for private mortgage insurance. Usually, a PMI is between 0.3 to 1.5 percent of the mortgage and varies depending on your credit score and the size of your down payment.
Renovations and utilities
Buying a new house isn’t as simple as paying for it and moving in it with your old furniture. Sometimes, renovations need to be made and you need to account for that cost along with the house’s cost as well.
In addition to that, you’re also required to cover the cost of utilities such as water, electricity, and gas each month.
When you’re buying a house, it’s easy to get blindsided by all of these hidden costs. One way you can be prepared for it all is with the help of a real estate agent who can make the process of buying a house easier for you.
If you’re looking for a house in Fayetteville, NC, avail the expert real estate services of Phillip Fehler. With his extensive knowledge of local real estate trends, the Fathom Realty real estate broker can help you find the right house.
Get in touch with us today!