5 Important Closing Costs to Plan For When Buying a New Home

Posted on Category:house and home

Buying a new home can be overwhelming to say the least. The excitement of finally finding the one house to call your own is unparalleled. Nevertheless, some future homeowners disregard closing costs until the last minute, which can lead to a great deal of stress. Here is a quick checklist of a few of the expenses you should keep in mind during this memorable experience.
A home inspection is a vital tool for the new buyer, as it can provide you with some peace of mind regarding the status of your new home. Home inspection identifies any structural, water, and/or electrical damage, and allows you to know what you are getting into and budget accordingly. Inspection costs can vary, but generally run for around $400. Furthermore, if an inspector discovers a plumbing problem or other household issue, then you are able to prepare financially for future maintenance. As a result, the upkeep will not come as a surprise later on.
Prepaid Costs
Frequently new homebuyers forget prepaid costs, such as water bills, utilities, home association fees, and property taxes. These bills should be discussed upfront with your real estate agent. An experienced, reputable realtor should review this list with you before closing and advise accordingly. Just make sure to have money set aside for such costs.
Financial institutions may require a home appraisal before approving your loan. This is a regular practice. Keep in mind that appraisers are licensed professionals by individual states, and some lenders do have an appraiser on-staff. If you are not comfortable having your lender provide you with an appraiser, feel free to hire someone who does not have any ties. Appraisal costs vary depending on your state of residence - the best person to advise you on this task is your realtor.
Insurance is necessary to protect your home in case of flood or fire damage. Insurance coverage varies depending on what type of policy you buy. There are many packages and numerous insurance companies available, so make sure to do plenty of research. Compare costs and choose the best one for your situation. One thing to remember is that insurance is an annual cost, so add it to your yearly budget.
Additionally, do not forget title insurance. Title insurance protects you from issues arising from incorrect signatures on documents, forgery, or other title defects that may result in financial loss. Furthermore, if the previous owner had any permit violations, then you will not be held responsible for them.
Moving Day Costs
Expenses incurred on moving day can be some of the highest expenses you pay when moving into a new home. Some people forget to set aside finances for painters, locksmiths, and new kitchen appliance installations. How much are professional movers going to charge? Are you hiring someone to touch-up the driveway, yard, and renovate the landscaping prior to moving-in? These are all things you need to keep in mind when reaching the closing phase on buying your new home.
Buying a new home is an exhilarating experience, and when you reach the closing cost phase, you are narrowing in on moving day. Finding an experienced real estate agent to assist you throughout the entire process will make your transition into a new home much easier. When you find an experienced realtor who is able to provide ample information about your home, the neighborhood, other homes in the area, and local schools, you will be able to focus on the positive thoughts regarding buying your new home and all it entails.