Understanding What it Really Costs to Buy a Home
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Are you planning to buy a home? There are so many costs involved that it can seem overwhelming. In “
Buying a Home? Know What it Really Costs,” the real estate experts at the Equifax Finance Blog break down and explain some of the expenses that you should be prepared for if you’ll be buying an Atlanta new home soon.
Let’s pretend you’ve found your dream home and it is $200,000. Here are a few of the costs that you’ll have to cover in order to make the home yours.
- Your down payment could be 20 percent or more of the sale price of the home – in other words, $40,000.
- Closing costs vary around the nation, but can be estimated at being around five percent of the sale price of the home, or around $10,000. Once you’ve been approved for a loan, you’ll receive a Good Faith Estimate from your lender, which estimates what you can expect to pay at closing, including lender costs, such as administrative fees; costs for services like title insurers and inspectors; and taxes and fees required by the government.
- Origination fees, the fee charged by the lender and mortgage broker for making the loan averaged around $2,400 in 2013, not including things like title insurance, title search, taxes, property insurance, association fees, interest and other prepaid items.
- Transfer taxes are a one-time tax for transferring ownership from one owner to another and these range from as low as .01 to almost three percent, depending upon your state, county or municipality. In Georgia, the fee rate is .1 percent, or $2,000 on our pretend dream home.
- Property taxes also vary greatly depending on where you live, but are paid for as long as you own your Atlanta real estate. Property taxes are paid in advance, so you may have to reimburse the people that you are buying the house from for taxes that they have already paid. Property taxes will depend upon tax rates and the assessed value of the home, as well as the time of year.
- You may also have to pay for special inspections on the home. A home inspection is generally around $500 (it could be more or less, of course, depending on the area, size of the home, and other factors). Special inspections like those for radon, pests or septic systems can be an extra $200 or so each.
Your lender and real estate agent can help you understand the costs better. Read the full article on the Equifax Finance blog for more information. While there, you can find lots of helpful articles on home buying and home ownership, as well as on other personal finance topics like retirement, taxes, credit, insurance, identity theft protection and more.