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Avoid Hidden Costs

How to Avoid Hidden Costs When Buying Your First House

by Jon Silver

Buying a home is a huge step forwards in anyone's life, and it can lead to significant changes in your future – for the better. However, it's a major purchase, and one that is quite expensive to make. As such, it's important that you pay attention to all of the fees and charges associated with buying a home and financing residential real estate. Many people are shocked to find out that the basic price of their home increases by thousands due to numerous hidden costs. Learn how to shop for home loans with no hidden costs or fees out of your pocket.

It's important that you take time to understand what these common hidden costs are. Sometimes you can actually get informed and then avoid them outright, but in other situations you'll have no choice but to deal with them. Either way, being aware of them is important for making sure that your home buying process goes the way that it should.

With that in mind, here are some of the most common hidden costs you need to know about.

  • Closing Costs – These fees can include a variety of things including attorney fees, loan origination fees, homeowner's association fees, taxes, and more. In most cases closing costs are around 2 to 5 percent of the total price of the home, so be prepared for that.
  • Appraisal Fees – Lenders won't just give you money until they ensure that the home you're buying is worth the right amount. You might pay for an appraisal out of pocket or have it included in closing costs, but either way it's one that you should expect.
  • Home Inspection – Inspection fees are well worth paying since it allows you to buy with confidence that the home you're purchasing is in good shape and free of any major damage or issues.
  • Insurance – Title insurance and mortgage insurance are two common types of insurance that are often required when taking out a loan, and the fees can be fairly large depending upon the home and the loan.

Along with these costs are the costs that can come with home remodels and repairs – two things you might not even consider until you're already facing the need for them. To avoid hidden fees there are a few things you can do. The first is to look into first time home loans with no hidden costs. There are numerous options out there, and they can help you get the right kind of loan without heavy costs.

The other step is simply to look closely at everything you're doing. Pay attention to the terms of a loan before you sign it. Look at the home to make sure it's in good shape. Find out if the seller is willing to cover closing costs. And even take a minute to apply for government grants or programs that can pay for down payments, closing costs, insurance, and other fees. Simply put, be careful throughout the entire process of buying your new home and you should be able to get a loan that doesn't leave you surprised due to the sudden appearance of hidden fees.

 

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