Hidden fees. Most of us think those apply mostly to the telecommunications industry, turning our $35 monthly plans into much higher without us ever being told. But it turns out there are plenty of places where you can get hit with hidden fees, and buying a house is one of them. These are some of the common hidden costs that are associated with buying a house. Be sure to include these in your overall budget to avoid any surprises when finally decide on your future property.
1. Home Inspection FeesA home inspection is not only absolutely mandatory, it’s something you want to have done. A house inspectioncan reveal many hidden details about a
prospective buy, from plumbing issues to potential foundation problems. Think of this fee as a hidden fee for future hidden fees.
2. Property Taxes
These “fees” aren’t exactly hidden, but they can surprise. Whenever you’re looking at a property, it’s important to calculate what the potential annual property taxes will be. They are usually not an insignificant amount of money, and they can change almost annually. It’s best to find the most recent percentages for all the places you’re looking at properties. Apply that number to the cost of the house and you’ll be close to what the property taxes will be.
3. Legal Fees
As I’m sure you know, buying a house involves a substantial amount of money, and that amount of cash needs to move through at least one lawyer to be legitimated. Legal fees are often tacked on as a last minute thing, and you are expected to cough up your fair share, no matter what side of the transaction you’re on. Fees vary wildly from firm to firm, but some will offer a bulk discount, of sorts, if the seller and buyer go through the same lawyer.
4. Mortgage Insurance
There are all kinds of insurance that we need and can change when we become property owners, including home and life insurance. But mortgage insurance is one that many people forget about when buying a home. This insurance is mandatory in some cases. For example, if you have a high-ratio mortgage, the government requires you to insure it against default and that you pay the cost of insurance.
5. Appraisal Fees
Appraisers have bills to pay too, and you get to pay them, however indirectly. Appraisers can be an important step in the home buying process, but it’s once again a fee people often forget they need to pay. In many cases, an appraiser will be required by whomever you’re getting your loan from. Some will pay the fee, but others won’t. Always check before you agree to the loan.
Hidden fees in homes are plentiful and difficult to track, but they’re still there. These are just five of such hidden fees that you should watch out for. If you do, there may be less financial surprises once you agree to buy a property.