9 Hidden Costs Most Buyers Completely Miss

Get ready to learn about the miscellaneous expenditures you'll encounter during the home buying process.   This report will uncover the 9 most overlooked costs home buyers miss.   Sit back, relax and get ready to become informed!

1.) Taxes, Taxes, Taxes

Think April 15th is the only day of the year you need to worry about taxes?  Wrong.  Taxes are an integral part of homeownership.  Property taxes from the state, county and local tax authorities will be assessed from you as a homeowner.  Most lenders will create what is called an "escrow" account.  This account will have money added to it each month that is taken from your monthly mortgage payment.  This money is then used by the lender to pay your property taxes and other items, like insurance on a schedule.  Make sure you ask the lender what your PITI will be, not just your mortgage dues.  This total monthly payment (PITI) figures in your mortgage payment and tax and insurance fees.  Land transfer taxes are also a consideration.  In some cases, this tax is assesses when property changes hands. 

2.)  Appraisal Fees

Your mortgage lender will most likely request that an appraisal be performed on the home you are purchasing before they agree to lend you the money.  The reason - the lender must make certain that the property is actually worth what the seller is claiming.  This protects the lender, keeping them from lending money that is not secured by real property.  Appraisals vary in price and can range from $150-$450. 

3.) Misc.  Origination and Loan Fees

When a mortgage company approves your loan, they are just getting started.  The process of finalizing your loan requires a number of intricate steps, including processing / document preparation, underwriting, closing and funding.  Because of this, lenders often charge additional fees.  Be prepared to pay processing and closing fees, in addition to origination fees and document preparation fees.  Of course fees can vary from lender to lender and it pays to shop around.

4.) Association and Maintenance Fees

Does the neighborhood you're moving into have a neighborhood association?  If it does, you need to watch out for association dues.  Some upscale neighborhoods will actually require that you join the association, so these costs need to be factored in ahead of time.

If you are purchasing a condominium, beware of maintenance fees, which help pay for grounds keeping, carpet cleaning and periodic renovation.

5.) Survey Fees

Lenders sometimes will request an updated property survey before they will agree to close and fund your loan.  Survey fees can vary from $600-$1000.

6.) Utility Service Fees

Moving into a new home will require that you set up utility service in many cases.  Cable, phone, electricity, gas and water companies will require an installation fee or "hook-up" fee to get you started.  Be ready to pay fees ranging from $10-$50 for each one of these utilities...

7.) Mortgage Insurance and Homeowners Insurance

Don't get mortgage insurance and homeowners insurance mixed up, as they are very different.  Mortgage insurance is required in cases where the down payment is smaller than the lender's requirement.  In these cases, you will pay between 0.5% and 4% extra to "insure" the mortgage.  These fees are usually rolled into the PITI (total monthly payment). 

TIP - After you have paid down your mortgage loan a bit, the equity in your new home will increase.  When the equity hits a certain percentage, in many cases, the mortgage insurance is no longer required and can be removed from your monthly payment.  Ask your lender for details.

8.) Moving Costs

Unless you decide to "do-it-yourself", you will be forced to hire a professional mover.  Movers can charge anywhere from $50-$100 per hour, so it pays to shop around.  Because of the many unscrupulous moving companies in business today, we highly recommend you do the following before hiring a mover:

-Call the local Better Business Bureau and ask for a report on the moving company you have picked.
-Call the state's Attorney General's office and ask if any reports were filed against the company in question

9.) Water Quality Certification

If you purchased a home that draws its water from a well, we advise that you have the water tested and certified.  Chemicals and bacteria can seep into a well over time.  So be safe and have the well tested.  Fees for well certification can vary by location.