What Do I Have to Pay For When Buying a Home?
When buying a home in Bellingham WA, there are several expenses to be considered. The cost of the home and mortgage payments are just two of them. It’s important to understand the lending process but make sure you don’t overlook the other fees that you’ll have to pay while buying a home.
You’ll need to pay some fees upfront while others might be rolled up into the mortgage. Here are the most common fees that you’ll need to pay while buying a home in Bellingham, or anywhere else for that matter.
If you’re going to pay a small down payment, you’ll need mortgage insurance. The function of this insurance is to protect the lender in case you default on the payments. Also known as private mortgage insurance, it is paid by the lender but in return, you’ll have to pay a higher rate on the mortgage.
When you borrow money for a home, you need insurance. It is like purchasing a policy before you close the deal. A homeowner’s insurance combines hazard insurance and personal liability insurance to provide a cover over the house and whatever is in it. It will protect you against any damage to your home or the things inside it. It includes four incidents – exterior damage, interior damage, damage to personal belongings, and injury while on that property.
This insurance provides a cover in case the title information of the house was false and the seller of the home didn’t really own it. The title of the property is verified before the purchase, but this insurance protects you in case there was some fraud in it.
When you close the sale, the house will go into escrow. You’ll have to put some money into an escrow account, which will be a safe deposit for both parties. While the agreement is finalized, the money will stay there. A part of your monthly mortgage charges will also go in escrow to pay for insurance and taxes.
Credit report charges
When you want to get a mortgage, the lender will want to check your credit rating. You’ll need to submit a verified credit report and it will include a small charge.
You will have to get an appraisal done to ensure that you’re paying the right price for your home. The appraiser will compare your home with other properties in the neighborhood to find a fair price for the property. You’ll need to pay this fee upfront.
Your real estate agent can prepare all the documents for closing the sale. They will charge a fee for that. These charges are generally included in the closing cost of the home. Make sure you discuss this with the agent or broker beforehand.
There may be some state and/or federal taxes to be paid. These taxes will need to be calculated according to the property you’re going to buy. There might also be some municipal taxes that you’ll have to pay.
You’ll also need to pay a recording fee. This includes the charges for holding the details of the sale. It can be paid by cash, check, or credit card.
These are just some of the fees you might have to pay when buying property in Bellingham. Not all of these charges are applied to each sale. Some charges might be paid by the lender. However, you must keep the above-mentioned fees in mind and learn more about them before closing the deal.
When you talk to your real estate agent about your requirements, make sure you discuss all these charges with them and give them an idea of your budget. You can also ask the agent for a preliminary HUD statement. This statement will cover all the expenses that you have to pay for buying the house. Before you finalize the purchase, make sure you review the statement so you can handle your expenses in a better way.
Talk to a trusted local expert
For no obligation free advice on how to successfully navigate your next Bellingham real estate purchase, contact me, Derek Worchel, your trusted local expert on 360 389 7988.